A state law mandates nearly 1,100 government officials in Pennsylvania must receive a 7.8% pay raise Jan. 1.
That law also is leading to similar-sized salary hikes for the heads of the two statewide public pension systems.
Those two positions are not among the officials listed in the 1995 law that ties raises for judges, top executive branch officials and state lawmakers to the year-over-year change in the U.S. Department of Labor’s Consumer Price Index for the Philadelphia metropolitan region.
This year’s 7.8% cost-of-living adjustment is more than double the 3.8% increase in the average weekly earnings for all private-sector workers in Pennsylvania, according to the U.S. Bureau of Labor Statistics.
The boards that govern the State Employees’ Retirement System and Public School Employees’ Retirement System last week approved resolutions that provided their executive directors with raises consistent with the COLA provided in the 27-year-old law.
It will bring the salary of PSERS Executive Director Terry Sanchez to $286,465, a $21,450 increase. The salary of SERS Executive Director Joe Torta’s salary will go to $215,600, a $15,600 bump.
Both came into their current positions on an interim or permanent basis a year ago. They brought with them decades of experience of working in either of the systems that manage funds that provide retirement income for hundreds of thousands of current and future state government and school retirees.
Christopher Santa Maria, who chairs PSERS board, said his board doesn’t have control over the executive director’s pay. The agency cites a provision in the retirement code that links that position’s pay raise to one provided to executive branch officials in the 1995 law.
Still, Santa Maria praised the job Sanchez has done for the system over the last year as it dug out from the fallout from an accounting error that led to thousands of teachers having to contribute more of their pay to the retirement system. Additionally, PSERS was under investigation by two federal agencies, one of which has since concluded without any charges being filed
“Terry Sanchez has done a fantastic job for us over the past year,” he said. “She came into a job that had significant challenges to it above and beyond what ordinarily would go with being executive director of a large pension fund.”
At SERS, no law was cited as justification for giving its executive director a 7.8% raise.
“The board reviews the executive director’s performance each year,” spokesperson Pam Hile said. “There are no set automatic pay increases for that position.”
SERS board Chair Dave Fillman said the board was united in approving the raise for Torta, which he described as not only in line with other commonwealth agency heads but “very appropriate based on Joe’s work and performance for us.”
Citizen activist Eric Epstein of RocktheCapital, a grassroots government reform group, along with an intern attended both pension boards’ meeting when the raises were approved. He said there was no public discussion before the votes.
Given both executive directors’ short tenures in their position and system’s poor rates of return on investments, he questioned how the boards can justify 7.8% raises.
“What are the raises based on?” he said. “If they get 7.8% when the market crashes, I shudder to think what they might get next year” if the market improves. He also pointed out with any state government salary increase comes a pension bounce that adds to taxpayers’ cost.
Starting Jan. 1, the governor’s salary will rise to $229,642, from $213,026. (Gov. Tom Wolf made a practice to donate the full amount to charity.) The lieutenant governor’s salary will rise to $192,897 while the state treasurer, auditor general and attorney general’s salaries each will be $191,061.
Cabinet heads’ salaries will range from $165,341 to $183,712, depending on the size of the agency, at the start of the new year. Boards and…
Read More: There are plenty of 7.8% raises going around state government come Jan. 1 – The Morning Call