Local lawmakers support state pension reform bill
Local lawmakers all appear to be on board with a pension reform bill affecting future public school and state employees.
On Tuesday, Senate Bill 1 passed through the Senate. The House will take up the measure today.
State Rep. Jeff Wheeland, R-Loyalsock Township, said he plans to vote in favor of the bill, despite its limitations.
“It’s not my first choice, but it’s my only choice when it comes to pension reform,” he said. “You are going to see some no votes because it doesn’t address the unfunded liability.”
Taxpayers and many school districts remain on the hook for paying the pensions of current state workers and school employees.
Schools, in particular, are feeling the financial strain of operating and educating students under the massive pension obligations.
“I’m going to vote for it,” said state Rep. Garth Everett, R-Muncy. “It’s not a pension bill I would prefer.”
Everett said he favors a defined contribution plan not unlike that covering many private sector employees.
Under Senate Bill 1, just $1.4 billion will be shaved off the cumulative pension tab of $215 billion over the next 30 years, according to an analysis by the state’s Independent Fiscal Office.
Everett noted that new employees covered under the proposed measure will continue to have a good retirement plan.
He said the bill also has bipartisan support, although some Republicans don’t feel the reforms go far enough.
“The governor is supporting this,” he said. “The business community is supporting it. Public sector unions are neutral on it. They aren’t fighting it this time.”
Senate Bill 1 moves away from the current full defined benefit system, offering a side-by-side hybrid option that pairs a 401(k) defined contribution component with a smaller defined benefit component, according to state Sen. E. Eugene Yaw, R-Loyalsock Township, a co-sponsor of the bill. The measure also provides new and current employees with the option of a 401(k) defined contribution-style plan and places future, or new, hires in one of three retirement plan options.
“Senate Bill 1 is a historic plan that reflects the seriousness of the situation we face with pensions,” he said. “The legislation takes the investment risks off of the taxpayers with regards to pensions, while shielding the retirement security of public employees from political risk.”
Failing to act, he said, puts the state’s finances and taxpayers’ burdens at risk.