Pennsylvania Gov. Tom Wolf and state Republican legislative leaders have reached agreement on a tentative framework for a final budget that includes pension reform, said Jeffrey Sheridan, spokesman for the governor’s office.
Details of the proposed pension reform that have been agreed upon by both parties are not currently being disclosed.
“All final details are being worked out,” Mr. Sheridan said.
In July, Mr. Wolf, a Democrat, vetoed a pension reform bill that proposed that all new state and public school employees be enrolled in a mandatory defined contribution plan, as well as offering an optional cash balance plan.
Mr. Wolf said in a news release at the time that the bill, which was sponsored by Republican state Sen. Jake Corman, provided “no immediate cost savings to taxpayers” and didn’t “maximize long-term savings for taxpayers.”
In September, Mr. Wolf proposed a new pension system that included a mandatory 401(k)-style plan for all new employees making at least $75,000 in annual income. In addition, all employees would be given the option to participate only in a defined contribution plan at their time of hire. The plan also featured a risk-sharing component for all new employees. The $51.7 billion Pennsylvania Public School Employees’ Retirement System and $27 billion Pennsylvania State Employees’ Retirement System, both based in Harrisburg, together have an unfunded liability of $60.1 billion.