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SEIU statement on KRC analysis of Corbett/Tobash Pension Plan


Proposal guts retirement security and could dig pension hole deeper

 HARRISBURG, June 2 – The Service Employees International Union (SEIU) Pennsylvania State Council and members of the three SEIU Locals in the state said the Keystone Research Center report, “Moving Backwards on Pension Reform”, released earlier today, demonstrates that the pension proposals introduced by state Rep. Mike Tobash (R-Berks/Schuylkill) and supported by Governor Tom Corbett, devastates retirement security for new nurses, teachers, social workers, and other public employees, without generating any revenue that could address Pennsylvania’s current budget crisis.

“Today’s report proves the Corbett/Tobash plan is a lose-lose scenario,” said Gabe Morgan, President of the State Council and Pennsylvania State Director for SEIU 32BJ. “It devastates the retirement security of workers without providing substantial savings to either the state or schools districts and won’t pay down pension debt any faster.”

Further, the KRC report notes the minimal cost savings in the proposal are decades in the future and could be lost due to numerous hidden costs and if Gov. Corbett underfunds the pension plans over the next four years as he wants to do. 

“As the KRC report highlights, this plan sacrifices the retirement security of the next generation of social workers, teachers and nurses without making significant progress on the pension debt,” said Kathy Jellison, President of SEIU Local 668.  “It has all the earmarks of the Corbett administration pension policy. The plan allows the state and school districts to avoid making full pension contributions; it continues to hold public employees responsible for debt; and it does nothing to raise revenue for the state that could be used to pay down existing debts.”

Among the alarming red flags revealed in the KRC report, the Corbett/Tobash plan:

  • Slashes retirement security for new hires by more than 40 percent for many employees;
  • Could “wipe out any Tobash savings” as investment returns decrease when contributions from new workers shrink;
  • Spends minimal savings like a new credit card if payments are lowered in the near-term; 

An actuarial analysis of the Tobash pension proposal for the Public Employees Retirement Commission found: 

‘For new employees the loss of retirement security is greater than the value of the cost savings for the Commonwealth. (Cheiron Report, May 26, 2014, page 14).’ 

“Once again, Gov. Corbett and his allies in the legislature are trying to make workers the scapegoat for his flawed choices.” said Neal Bisno, Secretary-Treasurer of the State Council and President of SEIU Healthcare Pennsylvania. “Instead of using the budget crisis as a misleading excuse to slash retirement security, the governor should look at ways to boost revenue by closing corporate tax loopholes and making big oil and gas companies finally pay their fair share.” 

Theodore Daniels, a janitor at Spruance Middle School in Philadelphia and member of 32BJ SEIU District 1201, added, “I work hard cleaning schools so that students can enjoy a clean, safe learning environment. Workers deserve better from lawmakers than a plan that guts our retirement while providing little or no savings for our struggling school districts.”

The real problem facing the Commonwealth’s pension systems is paying down the debt created when the state lowered employer contributions more than a decade ago. While the employees continued to make their full contributions, the state and school districts made artificially low payments. As a result, the Cheiron Report concludes with this sentence.

“The unfunded liability will need to be paid regardless of the plan design” (Cheiron Report, May 26, 2014, Page 13). 

Larika Jones, of York County and a member of SEIU Local 668 said, “I, and all other public workers, always make our full contributions to the pension system with every paycheck and we’ve made significant sacrifices with Act 120 of 2010. We’re already helping to pay down the pension debt which we did not create.”





The Service Employees International Union is dedicated to improving the lives of workers and their families and creating a more just and humane society. In Pennsylvania, the SEIU PA State Council represents nearly 80,000 workers in the areas of health care, public services, property services, school employees, laundry and distribution. We work to coordinate and unify the collective political and legislative priorities of all SEIU locals and districts throughout the state.


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