State House sends pension reform bill to Wolf
A pension reform bill received support from southwest Pennsylvania lawmakers in the state House on Thursday as it approved the measure and sent it to a supportive Gov. Tom Wolf.
Senate Bill 1, which the Senate approved Monday, would address financial issues facing the state’s two pension systems by offering state and public school employees hired in 2019 or after a 401(k)-style plan and two hybrid plans, and cutting fees and costs. Current employees in the pension plan would not be affected.
Estimates have the reform plan saving Pennsylvania as much as $5 billion over the next 30 years and an additional $3 billion in reduced investment management fees. The state’s two pension plans have an estimated unfunded liability of more than $60 billion.
The Senate approved the bill 40-9 on Monday and it passed the House 143-53 with bipartisan support.
State Rep. Jim Christiana, R-Brighton Township, Beaver County, said the bill was “long overdue and brings our pension systems in line with retirement plans offered in the real world.”
Echoing comments from some senators following Monday’s vote, Christiana said the plan was “not a cure-all, but it represents a historic step toward ensuring our current state employees, teachers and retirees receive the benefits they were promised.”
Freshman state Rep. Justin Walsh, R-Rostraver Township, said he declined a pension to avoid being a burden on taxpayers and was happy to support the reform plan.
“The three plans offered under this legislation give employees the flexibility to choose what is best for their families, while controlling costs borne by the state budget,” Walsh said. “This is an important step in reinventing Pennsylvania.”
State Rep. Rick Saccone, R-Elizabeth Township, said the legislation “will help lift a tremendous burden on our taxpayers. The pension system has been crippling the Commonwealth for decades.”
Saccone said the reform bill, which Wolf has said he will sign, would mean more investments in classrooms and infrastructure instead of money going toward supporting the pension system.
“This plan is step one in implementing meaningful pension reform,” said Saccone. “It helps stop the bleeding from within the current system and will help reduce annual taxpayer contributions over time.”
Christiana and Saccone are both seeking the Republican nomination in the 2018 U.S. Senate primary to challenge U.S. Sen. Bob Casey, D-Pa.
State Rep. Aaron Bernstine, R-New Beaver, Lawrence County, said it was important that the legislation “shifts financial risk away from our hardworking taxpayers” by creating the 401(k)-style plan.
“Rapidly increasing pension costs are driving up school property taxes beyond what many families can afford,” Bernstine said. “Reforming the system will help alleviate future property tax increases while ensuring current members of the pension systems receive the benefits they earned, and stabilize the system to protect all taxpayers.”
Wolf said in a statement that the bill “is an example of how Harrisburg can come together to make progress on issues that matter to the people of Pennsylvania.” He said the process that led to the bipartisan support “is a byproduct of both Republicans and Democrats working with my administration to achieve significant reform.”