Updated

Updated · The Morning Call · Jun 25

Pennsylvania Lawmakers Weigh COLA for 60,000 Pre-Act 9 Retirees After 20-Year Freeze

Updated

Updated · The Morning Call · Jun 25

Pennsylvania Lawmakers Weigh COLA for 60,000 Pre-Act 9 Retirees After 20-Year Freeze

Q: A pension fund is $5.2 billion richer. Why are 60,000 retirees still waiting for a raise after two decades?

They are still waiting because Pennsylvania’s pension gains do not automatically trigger raises for these retirees; a cost-of-living adjustment requires separate legislative approval, and that has not happened since 2002 or 2003 for this group. The retirees in question are roughly 60,000 “pre-Act 9” former state workers and public-school employees. Act 9 of 2001 increased benefits for active employees but did not extend comparable relief to people already retired. Since then, their pensions have largely been frozen, even as inflation has sharply eroded their buying power. PARSE says many are now in their 80s and live on pensions averaging under $20,000 a year. The pension system’s improved finances strengthen the case for action but do not by themselves change benefits. Pennsylvania’s State Employees’ Retirement System reported a 13.7% return in 2025, adding about $5.2 billion to the fund, and said unfunded liability fell by more than $500 million. Even so, pension officials and lawmakers still have to weigh long-term sustainability, future market risk, and the added cost of any COLA. That is why the issue remains in the General Assembly. House Bills 408 and 411 would provide ad hoc COLA relief for pre-Act 9 retirees, but until legislation passes and is signed into law, no increase is paid. So the short answer is that the money is there to improve the debate, but the raise itself depends on policy action, not fund performance alone.

1 articles · Updated · The Morning Call · Jun 25

House Bills 408 and 411 are moving through the Pennsylvania General Assembly to grant cost-of-living increases to about 60,000 retired state and public-school workers who have not received one since 2002 or 2003.
Those pre-Act 9 retirees are mostly in their 80s and live on pensions averaging under $20,000, while food, housing and healthcare costs have risen 88%, 85% and 111% over the past two decades.
Supporters argue the pension system can absorb the change after the State Employees’ Retirement System reported a more than $500 million drop in unfunded liability and lower contribution needs for newer employees.
The push revives a practice once common in Pennsylvania: from 1968 to 2002, lawmakers approved COLAs every four or five years, but retirees already out of service when Act 9 passed in 2001 were left behind.