HARRISBURG, Pa. (AP) – Republican lawmakers in the Pennsylvania Legislature launched a new push Tuesday night to overhaul benefits in Pennsylvania’s two large public pension systems as the state grapples with tens of billions of dollars in pension debt.
A conference committee of six lawmakers approved the bill in a late-night, party-line vote, sending it to up-or-down votes in the Republican-controlled House and Senate, expected Wednesday.READ MORE: Pittsburgh Bureau Of Fire On Scene Of Duplex Fire In Lawrenceville
The bill, which would deliver no short-term savings for the state or school districts, is a variation of legislation that Republicans have tried unsuccessfully to pass for several years. It arrived at the end of the legislative session, as lawmakers worked late to pass a flurry of legislation.
It would reduce traditional pension benefits for newly hired state government and public school employees and add plan options that rely on a 401(k)-style benefit.
Supporters say the changes would help shield the state and school districts from spikes in pension obligations in the future, as markets fluctuate. Over 32 years, the bill would lower projected pension obligation payments of more than $200 billion by about $2.6 billion, according to an analysis by the state Independent Fiscal Office.
Sen. John Blake, D-Lackawanna, described the projected savings as “nominal” and said there would be some higher costs in the short term.
“If we did nothing we wouldn’t impose $95 million in additional costs on our taxpayers,” said Blake, who voted no.
Democratic Gov. Tom Wolf was noncommittal on the bill, although he had pledged to sign earlier versions of pension legislation advanced by the House and Senate.
Pennsylvania’s pension debt is estimated at more than $60 billion, caused largely by years of state government failing to make timely payments, investment shortfalls and a sweeping increase in pension benefits in 2001 approved by lawmakers.READ MORE: 'We Got Banged Bad:' Freedom Hit Hard During Saturday Morning's Storms
Pension debt, said Rep. Mike Tobash, R-Schuylkill, “is crushing our public education program.” He was a yes vote.
Under the bill, future employees of state government and public schools would be offered the option of three plans. One would be a full 401(k)-style benefit while the other two would blend a traditional pension benefit and a 401(k)-style benefit.
The proposal also would boost the age for full retirement benefits from 65 to 67.
David Draine, a senior researcher at the Pew Charitable Trusts, said the bill also would improve the financial position of the two large pension funds by $5.6 billion, turning a $2.5 billion pension debt into a $3.1 billion surplus after 32 years. That is partly due to a requirement that savings from the proposed changes be used to pay down the pension debt, Draine said.
The bill would relieve the state and school districts of 60 percent of the risk from investment shortfalls, Draine said. A career worker could earn 90 percent of take-home pay annually under the bill, including Social Security, compared to 100 percent now, Draine said.
State police troopers and state corrections officers would not be affected.National Weather Service Confirms 2 Tornadoes In Beaver County
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