March 21
1, 2013
Dear Hon
norable Mem
mbers of the Pennsylvan
nia House:
RE: Gro
ove Municip
pal Pension Reform Billl
ustainable Co
ommunities,, we stronglyy urge your cconsideration in
On behallf of the Coaalition for Su
co-sponsoring municcipal pension
n reform legiislation propposed by Repp. Seth Grovve (co-sponsor
memo is attached). Our
O growing statewide an
nd bipartisann coalition inncludes nearrly three dozzen
organizattions, includ
ding businesss chambers, municipal a ssociations, professional associationns and
community developm
ment organizzations.
mend state policy
p
makerrs for beginn
ning to tacklee state level pension refoorm and ask that
We comm
you recog
gnize the eq
qually dauntin
ng crisis at the
t municipaal level. Incrreasing numbbers of
communities suffer from
f
varying
g levels of fisscal distress , driven by ooutdated, infflexible and
uncompeetitive state laws
l
and pollicies that un
ndermine eveen the best m
managed munnicipalities. The
chief cosst-driver for many
m
municcipal budgetss is uniformeed union pennsion costs. T
These costs force
deep cutss to other wo
orthy municiipal servicess and even too the police aand fire rankk and file.
Municipaal pension sttress is widespread, hittin
ng urban, suuburban and rural areas aalike. In factt, 66
of Pennsy
ylvania’s 67
7 counties haave at least one
o municipaality with a ppension plann that is undeer a
high leveel of financiial distress which
w
accoun
nts for roughhly 1/3 of ouur state’s poppulation.
We belieeve the Grove pension reeform legislaation will briing reality annd fairness too our municipal
pension practices
p
wh
hile at the sam
me time prottecting pensiion benefits and job oppportunities foor
future un
niformed union officers.
Highligh
hts from Rep. Grove’s mu
unicipal pen
nsion reform proposal aree:



Holds
H
harmleess current uniformed
u
un
nion pensionn benefits;
For
F new hires only, shiftss to a cash balance
b
“hybbrid” plan – a balanced aapproach thatt
in
ncludes aspeects of both a defined beenefit a definned contributtion plan. A hybrid plan, as
designed
d
here, also allow
ws existing pension liabillities to be ppaid down ovver time andd
without
w
the need
n
for new
w revenue;
Authorizes
A
an
n optional 457 plan as an
n additional employee reetirement tool;
Page
P
2 of 2: Co
oalition for Susstainable Comm
munities letter to PA House: 3/21/13




Requires
R
pen
nsions to be calculated
c
on
n base pay oonly, eliminaating the unaaffordable prractice
of
o “spiking” (which occu
urs when finaal base pay ccalculations include overtime hours and
unused
u
sick/v
vacation day
ys);
Removes
R
pen
nsion benefitts from the collective
c
baargaining proocess;
Establishes
E
pension
p
plan portability options
o
for nnew hires; annd
Improves job
b and pension
n security fo
or uniformedd unions.
Our coaliition came to
ogether becaause we caree deeply for oour communnities and waant them to
succeed. Like you, we
w understand that uncon
ntrolled costss result in lay
ayoffs, servicce cuts and/oor tax
increasess. These optiions harm the very work
kers, residentts and busineesses neededd to sustain aand
grow a co
ommunity. No
N one wan
nts to live, wo
ork or grow a business iin an over-taaxed, underserved, unsafe,
u
and fiscally
fi
unstaable commun
nity.
Much of the language was carefu
ully developeed over the ppast year witth the input of the entiree
coalition including laanguage development by
y both the Peennsylvania Municipal L
League and tthe
Pennsylv
vania State Association
A
of
o Township
p Supervisorss.
Thank yo
ou for your consideration
c
n in supportiing this legisslation.
Yours respectfully,
Ellen Horran
President and CEO
Greater Reading
R
Cham
mber of Comm
merce and
Industry
John A. G
Garner, Jr.
Executivee Director
Pennsylvaania Municippal League
cc: Honorable Tom Corb
bett, Governor of Pennsylvan
nia
Honorrable Sam Smitth, Speaker of the Pennsylvan
nia House of R
Representativess
Honorrable Mike Turrzai, Majority Leader,
L
Pennsy
ylvania House of Representattives
Honorrable Frank Dermody, Democcratic Leader, Pennsylvania
P
H
House of Repreesentatives
Honorrable Seth Grov
ve, Pennsylvan
nia House of Representatives