HARRISBURG, Pa. (NewsRadio 1020 KDKA/AP) – Pennsylvania is moving to cut costs again in its big public pension plans, among the nation’s most troubled.
Gov. Tom Wolf signed legislation Monday that’s projected to provide a less expensive pension benefits structure for future school and state government employees beginning in 2019. It’ll also shift some risk of investment losses off taxpayers and onto the public employees of tomorrow by introducing a 401(k)-style benefit.READ MORE: Pittsburgh Weather: Sunny, Comfortable Tuesday
Gov. Wolf tells the “KDKA Morning News” that it shows they can get things done in Harrisburg and work across party lines.
Wolf says it’s fair to both state employees and taxpayers alike.
“The employee gets the ability to manager his or her own portfolio. This particular pension reform didn’t touch the benefits of existing employees so it’s fair and it takes all the risks that employers have in a defined benefit plan away from the taxpayers,” said Wolf.READ MORE: Washington Man Killed In Late Night ATV Crash
It’s Pennsylvania’s second pension benefits reduction for future employees in eight years. About one-third of U.S. states already administer a mandatory or optional 401(k)-style retirement benefit for employees.
Olivia Mitchell at the University of Pennsylvania’s Pension Research Council says the bill eventually will provide some relief from pension costs. But, Mitchell says the legislation doesn’t fix the funding gap in the current pension plans.
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