Senate Leaders Press Gov. Wolf to Sign Pension Modernization Plan that Saves Taxpayers $10 Billion

(HARRISBURG) – As the General Assembly delivers pension reform to the Governor’s desk, Senate leaders press Gov. Wolf to sign the bill that restructures the state’s public employee pension systems in order to provide needed fiscal relief and make the systems sustainable in the long term.

“Skyrocketing public pension costs are the number one cause of property tax hikes and cutbacks,” said Senate Majority Leader Jake Corman (R-34). “Moving to a defined-contribution plan is the most responsible approach for the people of Pennsylvania and will be the most significant pension public policy achievement in recent history. Gov. Wolf should embrace real reform for our pension system and sign this legislation.”

“I commend our colleagues in the House of Representatives for taking swift action to move Senate Bill 1 forward to the Governor’s desk,” said Senate President Pro Tempore Joe Scarnati (R-25). “By changing Pennsylvania’s pension systems, employees will be given a fair retirement plan and school districts will find themselves with additional resources to direct toward the classrooms, instead of constantly raising property taxes.”

“Based on the scale of the Commonwealth’s current pension obligation and the risks it poses on our ability to reach other long-term budgetary challenges, adopting an entirely new approach is the only means to ensure over time that no new and escalating burdens are put on the backs of our taxpaying citizens,” Senate Appropriations Committee Chairman Pat Browne (R-16) said. “Passage of this legislation takes vital steps toward meaningful pension reform and reducing the current unsustainable and unaffordable costs facing Pennsylvania taxpayers.”

“Pension reform is critical to the future fiscal health of the Commonwealth by addressing one of the largest cost-drivers,” said Senate Majority Whip John Gordner (R-27). “By moving future hires into a plan that more closely resembles most private sector retirement plans, we have addressed that critical need while being fair to current employees and retirees.”

Senate Bill 1 moves the state forward through a Defined-Contribution plan for new employees, removes taxpayers from the risk business and shields retirement security from political risk. Benefits already earned for current employees and benefits of current retirees are not affected by this bill. Members of the General Assembly are moved into the Defined-Contribution plan upon re-election.

The legislation also creates a commission of investment professionals and retirement advisors that will study, publish findings and make recommendations to the General Assembly and the Governor on ways in which our pensions systems can be more cost effective and successful. Senate Bill 1 also requires each member of the PSERS and SERS Board to obtain mandatory training in investment strategies, actuarial cost analysis and retirement portfolio management on an annual basis. Both of these changes, the Commission on investments and Board reforms will make real tangible differences to our taxpayer funded pension systems.

CONTACTS:

Drew Crompton dcrompton@pasen.gov 717-787-7084

Jenn Kocher jkocher@pasen.gov  717-787-1377