Pennsylvania’s public pension crisis extends beyond the two big state employee plans. The Keystone State is home to 3,200 different municipal pension plans, and Auditor General Jack Wagner says many of them are in fiscal distress.
Wagner is authorized to audit about 2,600 of those plans, and his new special report finds that 36% of them are in financial distress. They have an aggregate $10.2-billion in assets, but $17.4-billion in liabilities.
Wagner’s top recommendation is to consolidate. He tells Radio PA that consolidation based on class of municipality could result in 30 – 40 plans, instead of thousands. “As a matter of fact, with those 3,200, we have 25% or approximately one-fourth of all local public pension plans in America.”
Consolidation could result in drastically reduced administrative costs and increased returns on investment, according to Wagner. “You would have a lesser obligation of the taxpayer in terms of making commitments to those plans,” Wagner explains. “This is all common sense.”
It’s also something that would require legislative action, and state lawmakers are already mired in a debate about what to do with the state employee pension plans, which have a combined $40-billion in unfunded liabilities.