For Immediate Release
Contact: Cindy Hamill (856) 607-4208
Senate Tackles Growing Crisis, Advances Responsible Pension Reform Bill Stops Sending More Public Employees Into Broken Retirement System
May 11, 2015, HARRISBURG, Pa.—Today, the Senate Finance Committee tackled the biggest cost driver in Pennsylvania’s budget: public sector pensions. The committee passed Senate Bill 1, kicking off a renewed push for an affordable and predictable defined-contribution retirement plan for all new state and school district employees—including lawmakers themselves.
"The first priority of any pension reform plan must be to stop throwing more people into a failed system," commented Nathan Benefield, vice president of policy analysis for the Commonwealth Foundation. "Thankfully, the Senate bill takes a critical step by moving new employees to a 401(k)-style retirement system, like in the private sector. The old defined-benefit system has failed both public employees, whose retirement savings are subject to political manipulation and underfunding, and taxpayers, who are on the hook for $50 billion in pension debt that will continue growing if nothing is done.
"Under this bill, all lawmakers—upon election or reelection—would be enrolled in the new 401(k)-style plan. That should reassure new public employees that the hallmarks of defined-contribution retirement plans, like personal ownership, portability, and guaranteed full funding, are part of a dependable and responsible retirement—one that private sector workers have relied upon for decades."
"Over the last six years, pension contributions by school districts have risen by nearly $2 billion—enough to pay the salaries of 30,000 new teachers. While SB1 isn’t perfect, it would stop the bleeding, help prevent future funding crises, and take a big step toward ending the political manipulation of public employees’ retirements."
Nathan Benefield and other Commonwealth Foundation experts are available for comment today. Please contact Cindy Hamill at (856) 607-4208 to schedule an interview.
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