Members will recall that in the May edition of the Voice, the Association joined House Ways and Means Chairman Paul Haley and Treasurer Shannon O'Brien in taking the governor to task for his unilateral move to revalue the Commonwealth's pension funding schedule. The schedule, through the use of various actuarial assumptions, sets the financial goals and annual appropriations for the State and Teachers' retirement systems for the next eighteen years.

By early May, Cellucci and his top fiscal lieutenants had successfully made their case justifying the revaluation which reduced the scheduled state pension appropriation for FY 2000 by $47 million. The scheduled amount, as determined by the plan revised in 1998, was set to be roughly $957,000,000. Under the new schedule, the appropriated amount is $910,024,000.

The information, released by the Administration, demonstrates that the schedule can be adjusted after updating the assumed mortality table, instituting an actuarial value system, and most importantly, accounting for the exceptional investment returns posted by the Pension Reserves Investment Trust (PRIT) Fund over the past several years. Through the analysis of this information, the House and Senate budget writers were convinced that the funding schedule changes were justified.

"Out of fairness to the governor we have to set the record straight. What initially appeared to be a raid on the funding schedule has turned out to be a justifiable change," explained Association President Ralph White. "Once the governor provided the background information to the Ways and Means Committees, the change in the funding schedule began to make sense. By tightening up some assumptions and taking advantage of the fantastic earnings, the schedule can be reduced without jeopardizing benefits.

"However, I still have to take issue with the manner in which the schedule was redone. Chapter 32 establishes a clear process to bring all of the interested parties together to make the necessary adjustments to the schedule. No one party is supposed to take unilateral action. The Administration could have avoided a lot of confusion if they had just played by the rules that we have all abided by for the past decade."