House approves pension COLA
HARRISBURG — A House committee approved two similar bills Monday to provide a cost-of-living adjustment (COLA) in the monthly state retirement benefit for thousands of long-retired government employees in Pennsylvania.
The panel debate over the legislation featured differences in party views over meeting state pension obligations and the cost of that, the role of COLAs, including the COLA for state lawmaker salaries; and issues related to inflation and retirement security for senior citizens.
The State Government Committee voted 14-12 in favor of House Bill 408 sponsored by Rep. Daniel Deasy, D-Allegheny, to provide COLAs to retired state government and public school employees.
HB408 would bring increases between 10% to 20% of the current annuities of eligible beneficiaries, based on the year of retirement in categories dating to 1982.
The panel also voted 14-12 in favor of House Bill 411 sponsored by Rep. Steven Malagari, D-Montgomery, which is similar to HB408, but includes a separate range of annuity increases from 15% to 24.5%.
The bills apply mainly to members of the Public School Employees’ Retirement System and the State Employees’ Retirement System who retired before July 2, 2001. The 2001 date refers to a large state pension increase enacted that year, known as Act 9 of 2001.
If enacted, the increases would take effect July 1.
The House passed similar legislation last session by 140-63 in the Democratic-controlled House, but it died in the Republican-controlled Senate. According to a fiscal note for last session’s House Bill 1416, about 70,000 retired school and state government employees would be eligible for a COLA.
Malagari said the last COLA approved by lawmakers for these beneficiaries was in 2001. He said inflation is making it more difficult for these retirees to pay for medicines, food and transportation costs.
Committee Minority Chair Brad Roae, R-Crawford, opposed the bills saying they are fiscally irresponsible given an estimated $60 billion unfunded liability for the two state public pension systems and the cost would fall on many taxpayers who don’t have pensions.
Rep. Joe Webster, D-Montgomery, substituting as committee chair, said the unfunded liability has grown over the years because the state government as the employer hasn’t properly funded the pensions.
Rep. Malcolm Kenyatta, D-Philadelphia, said lawmakers should not oppose pension COLAs for retirees when they receive an annual salary COLA tied to inflation under a 1995 state law.
Roae said he has supported bills to end the legislative COLA, but they haven’t seen any action.
