Pennsylvania has sent $427,788,682.09 in state aid to 1,441 municipalities and regional departments to support the pension plans of police officers, paid firefighters and non-uniformed municipal employees, Auditor General Timothy L. DeFoor announced on Wednesday, November 4, in Moon Township, Allegheny County. This year's allocation carries a milestone the department says has been more than two decades coming: it includes the first cost-of-living adjustment, or COLA, for retired municipal police officers and firefighters since 2002.

Source: Pennsylvania Department of the Auditor General (Nov. 4, 2026)

DeFoor announced the distribution alongside State Senator Devlin Robinson and State Representative Valerie Gaydos. “State pension aid helps to make sure municipalities can keep their promises to retired employees who spent decades serving their communities, often performing very dangerous work,” DeFoor said. “This funding also helps to reduce burdens on local taxpayers.” Robinson praised Moon Township's stewardship of its pension system, and Gaydos, who said she supported the cost-of-living adjustment in the state budget, added that many of these retirees “have gone two decades without a pension increase.”

Source: Pennsylvania Department of the Auditor General (Nov. 4, 2026)

Where the money goes, region by region

The department published the full regional split for 2026. Southeast and Greater Philadelphia received $181,856,819.10 — by far the largest share — followed by Greater Pittsburgh at $90,178,161.01 and the Susquehanna Valley at $65,286,735.03. The Northeast received $29,352,035.80, the Lehigh Valley $27,508,640.38, the Northwest $17,732,549.88 and the Central region $15,873,740.89. The seven regional figures add up to the statewide total of $427,788,682.09. Allocations by individual county are published on the department's website, PaAuditor.gov, so any borough, township or city can check exactly what its plans received.

How the aid is raised — and why the total moves

None of this money comes from the state's general tax take in the usual way. The funding is generated by a 2 percent tax on fire and casualty insurance policies sold in Pennsylvania by out-of-state companies, and the department notes that the revenue available for distribution varies from year to year. That is visible in the recent totals the Auditor General has reported: in 2025 the department distributed nearly $442 million to 1,482 municipalities and regional departments, and in 2024 it distributed about $404.73 million to 1,461 — so this year's $427.8 million to 1,441 recipients sits between the last two years on a slightly smaller recipient list.

The law behind the first rise since 2002

The COLA itself was created by Act 21 of 2026, signed by Governor Josh Shapiro on July 12, 2026, as part of the Fiscal Code legislation that accompanied the 2026-27 state budget, according to the Pennsylvania Municipal League. It applies to municipal police and fire annuitants who had received an annuity payment before January 1, 2021, and the increases began with the first annuity payment on or after August 1, 2026, the Independent Fiscal Office's August 2026 analysis explains. If a municipality did not include the adjustment in that first payment, the law requires it to add the missed amounts to the first monthly payment that does include it. The Commonwealth reimburses municipalities for the cost of the increase: the Municipal League notes that reimbursements start in fiscal year 2027-28 and that transfers from the Department of Revenue will cover the certified costs for the next 10 years.

Source: Pennsylvania Independent Fiscal Office — Act 21 Pension COLA Analysis (August 2026)

Why pension aid matters beyond the retirees themselves

The Auditor General's office has repeatedly warned that a large share of Pennsylvania's local pension plans are fragile. In its audit releases the department has reported that nearly a quarter — about 25 percent — of municipal pension plans are in some state of distress, meaning their funded ratio is below 90 percent, and that 98 percent of the plans are small plans, which generally carry higher administrative costs and are hit harder by rising municipal contributions and volatile investment returns. State law requires the department to audit the plans that receive this aid to ensure the money is spent as required, and those audit reports are published in the department's online Audit Report Center.

What it means for Pennsylvania's Punjabi and South Asian families

Pennsylvania is one of the priority states for Awaaz Punjab's US readers, with Punjabi and South Asian families concentrated in the Philadelphia suburbs of the southeast — the region receiving the largest share of this aid at $181.9 million — and around Pittsburgh, which received $90.2 million. Municipal pensions are not an abstract Harrisburg number for those households: they pay for the retired police officers and firefighters of the very boroughs and townships where readers live, and when state aid covers more of the cost, there is less pressure on the local property taxes and fees that fund the rest — the taxpayer point DeFoor himself made at the announcement. The COLA tiers also land directly in retiree households: a firefighter retired for more than 20 years now receives $300 more every month than before August.

What happens next

For municipalities, the immediate step is administrative: the aid must be applied to the pension plans as state law requires, and the department's audits will follow — any reader can look up their own municipality's most recent pension audit and its county allocation at PaAuditor.gov. For the COLA, the Independent Fiscal Office notes that annual costs will be certified by the pension systems and the Auditor General beginning as early as June 2027, and the state's reimbursement transfers to municipalities run for 10 years from fiscal 2027-28. Next year's distribution total will again depend on how much the 2 percent insurance tax raises.