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HB 2497 Comments

HB 2497 Comments

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Analysis of the problems with Pennsylvania House Bill 2497, the so called "pension reform" bill
Analysis of the problems with Pennsylvania House Bill 2497, the so called "pension reform" bill

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Categories:Types, Research
Published by: Commonwealth Foundation on Oct 13, 2010
Copyright:Attribution Non-commercial

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10/13/2010

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Richard C. DreyfussSenior Fellow
October 13, 2010 
 
 “Pension Magic”  “Pension Magicin Floridain Florida
an esewerean esewere
Orlando Sentinel –July 7, 2010
"Warren Buffett would close down his shop and givehis money to the city of Orlando" if it could get 8ercent sas Edward Siedle a former federalsecurities lawyer and president of Benchmark Financial Services in South Florida.
Cities like Orlando have three choices, Siedle says.1)"They can cut benefits, with is politically unacceptable”,2)"They can increase contributions from the employer and” , .3)“The third choice is called magic. That's what publicpension funds across the country are doing, coming upwith magic.” 
2
 
True
 
Pension
 
Reform
 
Must
 
Satisfy
 
Three
 
Basic
 
True
 
Pension
 
Reform
 
Must
 
Satisfy
 
Three
 
Basic
 
Princi les
 
Princi les
 
 – – Usin
 
Realistic
 
Fundin
 
Assum tionsUsin
 
Realistic
 
Fundin
 
Assum tions
1. Funding
 
must
 
be
 
current.
 
 – 
 
u
 
u
 
y
up”
 
in
 
the
 
aggregate
 
at
 
retirement
 
 – 
Achieving
 
a
 
100%
 
funded
 
ratio
 – 
S gn cant
 
pr vate
 
sector
 
pens on
 
re orms
 
occurre
 
n
 
2006.
 
(Lower
 
investment
 
assumptions
 
~
 
6%,
 
funding
 
periods
 
<15
 
yrs.,
 
market
 
value
 
of 
 
assets)
 
2. Costs
 
must
 
be
 
predictable.
 
3. Costs
 
must
 
be
 
affordable.
 
 – 
o
 
payro
 
ne
 
o
 
emp oyee
 
con r u ons
3

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