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Penn State Considers Amending Retirement Options For Employees

on July 02, 2010 5:47 PM

Saddled with fast-rising pension expenses, Penn State is examining whether it could limit its future participation in the Pennsylvania State Employees' Retirement System, or SERS.

The university's required annual contributions to SERS will grow from $12.9 million in 2009-2010 to $68 million in 2013-2014, according to Penn State data.

That increase, mandated under recent changes to keep the state pension system afloat, is a "huge unexpected expense" for Penn State, spokeswoman Lisa Powers said.

"I don't know how this can continue," she said.

About half of Penn State's non-faculty employees are enrolled in SERS, according to the university. The other half, along with most faculty members, are enrolled in plans offered by TIAA-CREF, the other retirement option that Penn State provides.

Preliminarily, the university is weighing whether it could save money and offer future new employees only the TIAA-CREF option, Powers said. The other two major state-related universities in Pennsylvania, Temple and Pitt, do not offer SERS plans to their employees.

The state retirement code allows Penn State employees to enroll in the state retirement system, SERS spokeswoman Pamela Hile said. She said only a change in that code could eliminate the option for Penn Staters.

And such a change would require approval by the state Legislature. The matter hasn't gotten that far yet.

Powers emphasized that even if future new employees are denied access to SERS, current Penn State participants in the system would not be affected.

"We have to look under every rock" for savings, she said.

StateCollege.com will post additional details in this developing story as they become available.

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