Pa. legislature takes on pension changes for future workers
HARRISBURG - With only one voting day left before it breaks for the election, the Republican-controlled legislature worked late into the night Tuesday to position a bill that attempts to deal with the rapidly rising cost of public employee pensions.
HARRISBURG - With only one voting day left before it breaks for the election, the Republican-controlled legislature worked late into the night Tuesday to position a bill that attempts to deal with the rapidly rising cost of public employee pensions.
If both legislative chambers approve the plan Wednesday and Gov. Wolf signs it, it would end what has been a years-long struggle to strike a compromise on one of the most divisive policy issues in the Capitol - one that has threatened to derail budget talks in recent years.
The measure the House and Senate will consider Wednesday would change the retirement benefits for future state and public school workers.
Starting in 2018, those new employees would choose from three new benefit plans, all of which would require varying levels of participation in a 401(k)-style plan.
Current employees will continue to be eligible for pensions that are calculated using the traditional - and more generous - formula that relies on their years of service and highest three years of pay.
State police, corrections, and some other law enforcement officers would be exempt under the proposed changes.
The plan is expected to lower roughly $200 billion in projected pension payments by the state and school districts by $2.6 billion over 32 years, according to an analysis by the state's Independent Fiscal Office.
The plan does not have any short-term savings.
Late Tuesday, a conference committee of House and Senate members approved the measure along partisan lines, with Democrats united in their opposition to it. They described the new benefit options as lacking.
Senate Majority Leader Jake Corman (R., Centre) rejected that criticism, calling it a sound proposal that begins to remove some of the risk from taxpayers.
"What we are doing is looking to the future," he said.
Corman also said the governor was prepared to allow it to become law.
Jeff Sheridan, Wolf's spokesman, would only say the governor "looks forward to reviewing the final product."
Pension changes became a key sticking point during last year's historic budget impasse between Wolf and the legislature. Republicans who have championed the issue have said the state cannot begin to address its fiscal problems without tackling rising pension costs.
For his part, Wolf, a Democrat, has said he would sign a reasonable pension bill - provided the chambers could strike a compromise on what to send him.
The two funds for state and public school employees have a combined debt of roughly $62 billion. That figure is expected to rise to $64 billion in the next fiscal year, according to the Independent Fiscal Office.
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