The Pennsylvania state Senate passed a pension reform bill that would change retirement benefits for most state employees and all school employees hired after Jan. 1, 2019, confirmed Jennifer Kocher, spokeswoman for the state Republican caucus.
The Senate on Monday voted 40-9 in favor of Senate Bill 1, which would move workers not in high-risk jobs such as state police and corrections officers into a hybrid pension system, receiving half of their benefits from the current taxpayer-funded plan and half from a 401(a) defined contribution plan.
New employees could elect to receive all benefits from the 401(a) DC plan. Current employees also will have 90 days to choose to opt-into the new plan in 2019.
“The current pension structure has created a financial obligation that crowds out other state spending, including that for education,” said Republican Jake Corman, majority leader and chief sponsor of the bill, on Monday. “This bill … addresses the structural problems with the state pension system (and) will provide stability and predictability in the state budget.”
The bill is projected to save more than $5 billion and shield taxpayers from $20 billion or more in additional liabilities if state investments fail to meet projections, said a news release issued from Mr. Corman’s office.
The bill has been sent to the state House of Representatives for consideration.
The full text of the bill is available on the state general assembly’s website.