Treasurer Rob McCord tries to link the pension philosophies of Tom Wolf and Tom Corbett in a new ad that points out that Mr. Wolf's firm terminated its defined benefit pension plan and replaced it with a defined contribution plan. In his so far unsuccessful efforts to get the the Legislature to confront the state's unfunded pension liability, Mr. Corbett has suggested that new employees be enrolled in a 401K-style defined contribution
None of the Democratic candidates for governor has offered a full solution to the pension dilemma, but Mr. Wolf, like Mr. McCord, has said that the defined benefit model should continue to cover state employees.
The Wolf campaign rebutted the ad, pointing out that the pension change took place when Mr. Wolf was not managing the company. The ad also asserts that the state pension system lost $19 million in the firm. The Wolf campaign questions the arithmetic behind the claim. According to the Philadelphia Inquirer, the state stystem had invested $50 million in a buyout fund with an overall value of roughly $1 billion. The fund, Weston Presidio V, in turn, invested $41 million to help finance a transaction that allowed Mr. Wolf and two cousins to reap $60 million from their interest in the firm in 2006. The fund now values its interest in the Wolf organization at $22 million. So, the Wolf campaign argues that it is wrong to assign all of the loss to the state pension system when it was part of a much larger portfolio of assets.
Wolf has frequently made the related but separate point that the firm and Weston Presidio's investment in it was worth nothing when he returned to the firm's management and restored it to solvency.