Creates Defined Contribution Plan for Employees, Elected Officials, & Judges
HARRISBURG – Senate Finance Committee Chairman Mike Brubaker (R-36) applauded his committee members today for advancing legislation which he has sponsored that addresses Pennsylvania’s ongoing pension crisis and establishes an expiration date to the defined benefit pension system that few enjoy and every taxpayer funds.
Senate Bill 922 was amended by Brubaker before passage by the Finance Committee. The amended legislation would create a defined contribution plan, or 401(a) plan, for new hires of the Public School Employees Retirement System (PSERS) and the State Employees Retirement System (SERS). This change would take effect in 2015 (January 1 for SERS members and July 1 for PSERS members). The amended bill would also make participation in the defined contribution plan mandatory for current legislators, the Governor, the Attorney General, the Auditor General, and Treasurer upon re-election and the judiciary upon retention.
The original language of Senate Bill 922 included changes to future benefits of current employees and also contained language that adjusted the collars. However, all language pertaining to current employees and collars was removed through Brubaker’s amendment. While he would have preferred a more comprehensive reform bill, Brubaker recognized that a compromise was necessary to gain a favorable vote out of the Finance Committee.
“The fact remains that our Commonwealth has an unfunded pension liability totaling $47 billion which needs to be honored with a plan to pay for it. With this debt expected to grow to $65 billion within a decade combined with rising property taxes, I remain baffled that anyone would choose to ignore this problem,” said Brubaker. “My amended legislation takes another step toward reforming our pension system and leaves us with a working product to consider now or in the future.”
Brubaker’s legislation was first unveiled last month and mirrored a comprehensive pension reform bill sponsored by Representative Chris Ross (R-158). The Senate Finance Committee also recently convened a public hearing on the proposals.
Senate Bill 922 will now be referred to the Senate Appropriations Committee.