Pa Pension Statute Unconstitutional
A Pennsylvania Commonwealth Court judge has ruled that a statute enacted last summer requiring a 1-percent increase in contributions to the state's pension programs by public-school employees is unconstitutional.
Last July, Gov. Richard L. Thornburgh signed a law requiring the state's 200,000 public-school employees to boost pension payments from 5.25 percent to 6.25 percent of their annual salaries, and some 100,000 state workers to raise their pension contributions from 5 percent to 6.25 percent. The changes were made to improve the retirement systems and slow the rise of taxpayer payments to both funds.
Following the adoption of the laws, companion suits were filed in Commonwealth Court of Pennsylvania by unions representing teachers and state workers.
In both cases, Judge James A. Crumlish ruled that the change was a breach of contract for those hired before it was enacted.
In the suit brought about by the4state's teachers' unions--the Pennsylvania State Education Association and the Pennsylvania Federation of Teachers--Judge Crumlish said that the increased-contributions law is unconstitutional when applied to anyone who entered the retirement system prior to July 22, 1983. But he said that the law can apply to anyone who entered the system after that date.
Judge Crumlish ordered the state to refund the amount collected from the teachers and state workers at 4-percent interest.
That means the state must pay some $12 million and juggle its fiscal 1985 budget to make up for the loss of the funds from the State Employees Retirement System, according to Michael J. Moyle, Governor Thornburgh's deputy press secretary. He said that the loss of $12 million is "not a major concern," considering that the state's general fund is about $8.5 billion.
Mr. Moyle said the state is considering an appeal to the Pennsylvania Supreme Court.--sr
Vol. 03, Issue 26