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HARRISBURG (Feb 28.) - And the Commonwealth Foundation thought the state’s pension system was in bad shape already?

Last week the Harrisburg-based, conservative think tank made some waves with its announcement of a new study showing state taxpayers will have to fund a 672-percent jump in pension contributions between now and the 2012-13 fiscal year.

But that was without any further enhancement of current pension benefits.

Now, state retirees are pushing for a cost-of-living adjustment in their pension benefits that would add nearly $3 billion on top of the current accrued liability of the state’s two retirement systems, the State Employees Retirement System (SERS) and the Public School Employees Retirement System (PSERS).

There are a total of approximately 230,000 retirees actively receiving benefits in the two systems.

“Traditionally, the General Assembly has passed a COLA ... for state retirees every four to five years,” said bill sponsor Rep. Lynn Herman, R-Centre.

“So many of our 16,000 members have pensions of less than $500 a month,” said Arthur Schwartz, president of the Pennsylvania Association of Retired State Employees. He added that any cost- of-living increase would be important to the daily lives of many of his association members.

“But obviously, I’m just presenting the personal side, not the fiscal side,” said Schwartz.

SERS Executive Director Eric Henry and PSERS Executive Director Jeffrey Clay said the fiscal obstacles aren’t easily surmounted. They indicated Herman’s legislation, HB2339 , would certainly add to the indebtedness of the pension plans.

“Every time you grant a COLA, it’s going to cost money,” said Clay.

Clay and Henry said the real problem, though, is the projected jump in employer contributions expected to occur in fiscal year 2012-13, regardless of a COLA being approved.

“The employer contribution rate will go from 5.46 percent in 2012 to 22.52 percent in 2013,” said Clay, referring to the PSERS rates. SERS will see a similar jump in contribution rates, added Henry. They explained, following a question from Rep. Will Gabig, R-Cumberland, that those percentages represented a difference of approximately $4 billion in payments from one year to the next. “That’s a significant amount of money, in my humble opinion,” said Gabig.

And who’s paying the money?

“Obviously it all comes from taxpayers, no matter if it’s from the local level or not,” said Gabig, noting that a portion of the tax dollars to pay for pensions will be collected by school districts and the rest by the state.

Nevertheless, Rep. Paul Clymer, R-Bucks, chairman of the committee considering the bill, is still optimistic a COLA can be passed without adding to the pension plans’ looming problems.

“I don’t know how we’re going to put all the pieces together, but I think we can do it, and I’m sure working with the experts in the field that that will be a possibility,” said Clymer.