UPDATE: Democrat who voted for police pension limits walks it back a bit

UPDATE: The lone Democrat to back a bill limiting local police pensions last week has qualified his support. Statement from Sen. Art Haywood, D-Roslyn: 

"I voted in favor of legislation that would give municipalities the option of defined contribution pension plans for new police and firefighter employees. As former President of the Board of Commissioners in Cheltenham Township, I understand the challenge of pension obligation growth. While this legislation would not reduce the approximately $8 billion owed to municipal pension across the state, it would curtail the growth of the pension obligation.

"At the same time, I have serious reservations regarding SB755 that I hope will be addressed as this legislation advances: 
- First, income to retirees must not be worse than benefits to state troopers. State and local police should be treated similarly.
- Second, our retired police and firefighters must have adequate replacement income under the new plan. The recommendations of the Auditor General that will soon be announced should be taken into account.
- Finally, the investments made under the defined contribution plans should be professionally, not individually, managed. Senator Eichelberger, the bill sponsor, has indicated a willingness to discuss these concerns and I hope we can reach an agreement. In voting to move this legislation forward, I hope to advance the conversation."

WEDNESDAY: Senate Bill 755, which would let Pennsylvania cities, boroughs and townships (except Philadelphia) exclude future police and firefighter hires from the state's 970 municipal police pension plans and a smaller group of fire pension plans, passed the Senate Finance Committee by a 7-3 vote,  with Sen. Arthur Haywood, D-Roslyn, joining Republicans in favor. The bill is sponsored by committee chair Sen. John Eichelberger, R-Hollidaysburg.

The bill would let municipalities give new officers retirement savings accounts similar to private-sector 401(k) plans. Retiree payouts would not be guaranteed like the current pensions, but rise and fall with changing interest rates and share values. A key provision of the bill would allow communities to remove all retirement plans from being subject to binding arbitration under the state law that normally governs police labor disputes.

The bill is opposed by the state Fraternal Order of Police union lodge. The lodge president, former Tredyffrin detective Les Neri, told me before the vote that his union is more favorable to House Bill 32, which would preserve guaranteed pensions but consolidate the plans into a larger plan to save administrative costs. Gov. Tom Wolf has also spoken in favor of consolidation, which state Public Employee Retirement Commission data suggests could save hundreds of dollars per officer per year.

The vote for what it called "modern" retirement plans was hailed by the Coalition for Sustainable Communties, an alliance of local business and municipal groups, including Democratic mayors of cash-strapped midsized cities, which has been trying to reduce the growth of local pension obligations. The coalition also supports House Bill 316, which would similarly let towns replace guaranteed pensions for new officers with a "cash balance" retirement plan. That bill passed the House State Government Committee earlier this month.

Besides allowing towns to move away from pensions for new hires, 755 would require the many officers who aren't paying into (and won't collect) Social Security to pay more of their income toward pensions; make the new plans "portable" so officers could continue to boost benefits as they changed jobs; and guarantee current and retired police and firefighters continue to receive benefits they have already qualified for.

FOP President Neri says officers typically qualify for pensions worth up to half their maximum pay (sometimes including overtime and unused leave) after they retire, unlike the state's veteran public schoolteachers, who can earn their full former incomes by combining state school pensions with Social Security. Neri said only a few municipal plans, such as Scranton's, are in "bad shape." He defended relatively early retirement ages for police officers as a way to protect the public from having to rely on officers too old to effectively fight crime.

A committe headed by elected state auditor general Eugene DePascuale, in Scranton today to release his audit of that city's badly underfunded pensions and the city retirement and funding policies that have brought it closer to bankruptcy, has drafted a report reviewing pension finance improvement suggestions for Gov. Wolf, who is supposed to make recommendations this summer.