James Votes for Bill to Preserve Pension Systems and Save Taxpayers Money
HARRISBURG – State Rep. Lee James (R-Venango/Butler) today voted for a bill approved by the state House in Harrisburg that would strengthen the pension systems for government workers and teachers while saving taxpayers money.
“This is a balanced approach to a complex issue,” James said.
The bill would save approximately $5 billion during the next 30 years, provide a competitive retirement benefit for future employees, and preserve and maintain promised retirement benefits for current employees and retirees.
“If we don’t reform the pension systems, the promises made to current employees and retirees are in jeopardy,” James said.
Pennsylvania has two public pension systems, which both have promised more in benefits than they can afford to pay.
The State Employees’ Retirement System (SERS) serves state workers, legislators and judges. The Public School Employees’ Retirement System (PSERS) serves teachers and school administrators. The combined shortfall in assets is approximately $60 billion. That is equivalent to two years of the entire budget of Pennsylvania.
The bill approved by the House would create a two-tier system for future participants in the two retirement systems. Future workers who earn less than $50,000 annually would participate in a defined-benefit pension system.
Employees who earn more than $50,000 would be enrolled in a hybrid plan. Their retirement plan would be a combination of the traditional public pension system and a 401(k)-style retirement plan more in line with retirement benefits offered in the private sector.
“The changes would affect only people hired in or after 2018,” James said. “Current retirees and workers would benefit from increased pension security. Taxpayers would benefit from the reduced cost in the future. New workers would still earn a very competitive pension benefit. This bill provides a specific benefit for every party at the table. This bill would partially move investment risk away from Pennsylvania taxpayers, which is similar to the direction private industries began moving more than 20 years ago. These changes would help save the pension systems.”
Senate Bill 1071 was amended in the House and, therefore, will return to the Senate for consideration.
Representative Lee James
64th Legislative District
Pennsylvania House of Representatives
Media Contact: Dan Massing
dmassing@pahousegop.com
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