Senate Republicans eye new pension plan for state, school employees

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HARRISBURG -- Senate Republican leaders plan to take a first step toward containing Pennsylvania's pension obligations by enrolling new state and public school employees in a defined contribution plan.

Under the proposal, state and public school employees hired on Dec. 1 or later would be provided a retirement plan similar to a 401(k), rather than the defined benefit plan used by current workers. Senate Majority Leader Dominic Pileggi, R-Delaware, acknowledged on Wednesday the switch would address only a portion of the state's pension problem. At the end of the last fiscal year, state employees and teachers had earned at least $37 billion more in pension benefits than the state had amassed to pay them.

"This bill is not a total solution, but an important part of the solution," Mr. Pileggi told reporters on Wednesday. "One that is achievable, one that is easy for people to understand and one that is long overdue."

While the proposal will address only future employees, he said legislators will undertake a "full and comprehensive discussion" of how to address the pension costs already incurred by state and public school workers.

House Majority Leader Mike Turzai, R-Bradford Woods, who appeared beside Mr. Pileggi, did not opine on the specific proposal, but he said the future holds a defined contribution plan for state workers.

"Ultimately we have to move to a defined contribution plan from a defined pension plan, because that's what everybody who's paying the taxes is doing," he said.

A spokesman for Gov. Tom Corbett declined to address the particular proposal but said the governor will work with lawmakers to change the pension system.

The proposal will be introduced in early June by Mr. Pileggi, along with Senate Majority Whip Pat Browne, Senate Appropriations Committee Chairman Jake Corman and Senate Finance Committee Chairman Mike Brubaker. With House and Senate leaders agreeing they will not hold a lame-duck session this fall, the proposal would have to pass each chamber before the November election to take effect by Dec. 1.

education - state

Karen Langley: or 717-787-2141. First Published May 31, 2012 12:00 AM


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