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Short-term pension relief

By - Last modified: April 12, 2013 at 9:54 AM

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Under current rate collars, employers in the Public School Employees' Retirement System, or PSERS, are expected to pay about $1.03 billion in net pension costs in 2013-14, according to a spreadsheet from the Office of the Budget.

That collective total is expected to increase to about $1.98 billion by 2017-18.

Proposed short-term collar tapering under Gov. Tom Corbett's multifaceted reform plan would reduce those net employer costs to $888 million next year, increasing to about $1.94 billion in 2017-18.

The governor has proposed reducing the annual increase in the employer contribution limit to the pension funds to 2.25 percent, instead of the 4.5 percent increase scheduled to take effect.

That amount would increase by 0.5 percent per year under the governor's plan until it reaches 4.5 percent again.

The biggest tapering savings would come in 2015-16, according to estimates. Instead of total employer costs of $1.66 billion that year, the proposed collars would reduce that number to

$1.32 billion.

In Central Pennsylvania, the biggest single-year savings for a school district would be 2015-16 in Central Dauphin. The projected net school savings would be about $2.03 million. Central Dauphin stands to save about $6.22 million during the next five years under Corbett's proposed collar tapering.

It would be more than $1 billion in total savings over five years for school districts and local education agencies, according to the administration. Most of that savings occurs in the first four years.

Click here to download a PDF file on the collar change in context of Central Pennsylvania's schools.

Jason Scott

Jason Scott

Jason Scott covers state government, real estate and construction, media and marketing, and Dauphin County. Have a tip or question for him? Email him at jasons@cpbj.com. Follow him on Twitter, @JScottJournal. Circle Jason Scott on .

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