From the PITTSBURGH POSTS-GAZETTE:
…Why does Pennsylvania face a dramatic spike in costs for state government pensions?
First, a decade ago lawmakers boosted benefits by 25 percent and raised retiree pensions without fully funding them.
Second, during the 2001-2003 recession the state axed its pension contribution.
Third, after the economy improved, contributions were kept below actuarially sound levels.
Fourth, the funds suffered stiff loses during the 2001 recession and in the current downturn.
Thus, much of the crisis can be traced to underfunding…
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