State House Sound Bites

Capitol reporter Katie Meyer covers Pennsylvania politics and issues at the Pennsylvania state capitol.

Senate GOP pension plan would hit current, future public employees

Written by Mary Wilson, Former Capitol Bureau Chief | May 6, 2015 4:03 PM
ScarnatiJoe_0309.jpg

Photo by Mary Wilson / witf

Senate President Pro Tem, Joe Scarnati (R-Jefferson), speaking after Gov. Tom Wolf's budget address in March.


State Senate Republican leaders want to make current state and school employees pay more toward their retirement to help shore up a severely underfunded system.

The same plan would also enroll future state and school employees in a 401(k)-style retirement plan more common in the private sector, closing the state's defined-benefit pension system to new entrants.

Those are two of the more controversial pieces of a public pension overhaul proposal expected to get a vote in the chamber next week. Highlights of the closely-guarded plan were released Wednesday.

Senate Majority Leader Jake Corman said the proposal addresses the rapidly rising costs of the underfunded pension systems, as well as the long-term costs of retirees who are living longer.

"It will modernize this system," said Corman during Wednesday remarks on the Senate floor.

According to a co-sponsorship memo, the bill would request, but not require, current employees to pay more toward their pensions. Workers who decline to pay more into the system would see their future pension earnings drop.

It's unclear at this point what kind of money would be generated by the proposed changes. The two pension systems are underfunded by about $53 billion, a sum that has grown due to sweetened retirement benefits, underfunding, and investment losses.

Democratic Senate Minority Leader Jay Costa said the proposal would penalize workers for a problem that is largely of the state's own making.

"We're now having to pay for what we didn't pay for all those years when we decided not to put anything into the systems," said Costa. "That, to me, is something that we need to recognize."

Corman likens the state's unfunded pension obligations to a tsunami, wreaking havoc on the state's finances.

"This pension problem has hit land. It's time to address it," Corman said. "Just sitting back and paying the bill, that's a lot to ask of the taxpayers."

Senate Republicans have made a pension overhaul their top priority this year, saying that they can't sign off on a state budget without changes to the state's retirement system.


Published in State House Sound Bites

back to top

Give Now

Support for WITF is provided by:

Become a WITF sponsor today »

Latest News from NPR

Support for WITF is provided by:

Become a WITF sponsor today »