Pensions watchdog has all powers back – for now

(Harrisburg) — Pennsylvania’s pensions watchdog has the greenlight to assume all of its duties, prompting Republican legislators to withdraw their lawsuit over the agency’s downsizing.

Wolf’s chief of staff sent a letter earlier this week to Public Employees’ Retirement Commission Board Chairman John Durbin rescinding the directive two months ago to close the commission and stop analyzing pension bills.

Sent Monday, the letter clarified the implications of a budget bill that became law a few weeks ago. The measure allocated the last $7 billion of this year’s state budget, effectively ending a nine-month gridlock. Wolf allowed the measure to take effect without his signature amid concerns about how a veto might affect public schools.

However, Wolf eliminates most of PERC’s funding in his budget proposal for next year, leaving only enough money for PERC to continue just part of its charge: collecting data from the commonwealth’s 3,200-plus local pension systems and disbursing state aid to many of them.

That work has been carried out, despite the budget back-and-forth, by through three PERC staffers transferred to the Office of the Budget, which the governor controls.

PERC’s ideal complement is seven people, although it’s been more like five in recent years. The board doesn’t plan to fill any vacancies in the immediate future because legislators are weighing whether to reassign PERC’s duties, according to chairman John Durbin.

What can restart immediately is PERC’s analysis of pension bills, says state Rep. Stephen Bloom, R-Cumberland.

Bloom says requests for at least three bills were outstanding from the House alone when the budget impasse started to impair PERC’s functioning.

Rep. Mike Tobash, R-Dauphin/Schuylkill, who sits on PERC’s board, says he’s not sure when the analyses will be finished. In the meantime, officials are trying to figure out how to improve the pension legislation vetting process, he says.

“Our hope is through the disruption – well, I’d call it a mistake – but hopefully, at the end of the day, we can make the process a little bit better,” Tobash says. “For now, we’ll be able to move quickly on some legislative requests so … lawmakers have the information they need.”

Tobash couldn’t say what, exactly, “quickly” might mean in terms of a timeline.

PERC also should be able to settle outstanding invoices from actuaries and commission more work, Bloom says.

These developments have, however, prompted Bloom and state Rep. Seth Grove, R-York, to withdraw their lawsuit against Wolf. They argued  gubernatorial overreach in his handling of the PERC matter. 

Bloom and Grove’s suit focused on the balance of power among branches of government. They haven’t commented on the possibility that the move was retaliatory.

Wolf’s line-item veto came on the heels of a disagreement at the end of last year about long-term consequences of proposed changes to the pension system. 

When asked previously, PERC’s former Executive Director Jim McAneny would stop just short of confirming his beliefs, citing concerns about other PERC staffers keeping their jobs.

McAneny went into private law practice after the commission closed in February.