GOP advances bill on pension overhaul

HARRISBURG

- Republicans yesterday advanced legislation to overhaul benefits in Pennsylvania's two major public-employee pension systems, over the protests of Democrats who say they have not had a chance to even read the bill.

The 410-page bill passed the Senate Finance Committee along partisan lines less than 72 hours after it was publicly unveiled. No hearing has been held on the bill or is even scheduled, and Senate Republicans aim to pass it by the end of the week.

Their hope is to make it a central part of negotiations with Gov. Wolf as the Democrat seeks approval for a tax increase to wipe out a massive projected budget deficit and to underwrite the biggest one-year increase for public schools. Wolf opposes a key element of the GOP's bill, the end of the debt-ridden traditional pension system that covers about 370,000 workers.

Democrats said a constructive discussion about addressing a $53 billion pension debt can happen only when there's a chance to debate different ideas or plans.

"That's not happening today," said Sen. Rob Teplitz, D-Dauphin.

Sen. John Blake, D-Lackawanna, said that he did not even have a chance to draft an amendment to the bill, and that he had no information about how the bill would affect taxpayers or the public school and state employees in the retirement systems. Democrats also say the GOP plan could dramatically increase the pension debt, trigger lawsuits and leave future retirees barely above the poverty line.

Republicans countered that pension issues have been debated before and they suggested that the only Democrat with whom they are interested in bargaining is Wolf, not Democrats in the Senate minority.

Republican senators envision the bill as a way to whittle down the pension debt and rid taxpayers of the responsibility to make up the difference when public pension investments miss certain benchmarks. The current system of guaranteeing an annuity to a retiree until he or she dies is unaffordable, said Senate Majority Leader Jake Corman, R-Centre.

The effort comes as contributions by state agencies and school districts have increased almost tenfold over the past decade to make up for years of government underfunding and disappointing investment performance. Helping fuel the pension debt was a huge benefit increase authorized by lawmakers in 2001. Nine years later, they rolled back the extra benefit, but only for people hired after 2010.

Under the Senate Republican plan, the traditional pension promised to about 700,000 active employees, retirees and beneficiaries would cease to exist for people who are hired or elected in the future. Instead, they would get a 401(k)-style plan - with a 3 percent employer contribution for school employees and a 5 percent contribution for state government employees - and a cash-balance plan that would earn up to 4 percent interest.