Jun. 14, 2016
HARRISBURG – Rep. Ryan Warner (R-Fayette/Westmoreland) today joined the majority of his colleagues in the House in approving reforms to the state’s public pension systems. Currently, the State Employees' Retirement System (SERS) and the Public School Employees' Retirement System (PSERS) have a joint debt of more than $50 billion.
The new plan is anticipated to result in billions of dollars in savings over the next 32 years.
“Teachers and state employees are not to blame for the pension crisis, but without reform, the benefits promised to them are in jeopardy and Pennsylvanians are at risk for massive tax increases,” Warner said. “The bipartisan plan passed today protects the benefits earned by current employees and retirees, and begins future employees on a plan that is more sustainable for taxpayers.”
Under the pension reform plan,
Senate Bill 1071, state and school employees, first hired on or after Jan. 1, 2018, would be enrolled in a hybrid retirement plan, which would combine both defined contribution (DC) and defined benefit (DB) components. The bill would only effect new employees, and would not take away any benefits already earned by current employees or alter benefit calculations for current employees.
The DB component of the hybrid plan would provide a predictable pension benefit for future retirees based on the first $50,000 of income. Any income above $50,000 would be covered through the 401(k)-type, or DC, plan which would allow participants to tailor their investments to their own needs, with at least 10 investment options.
Under this plan, the future pension investment risk facing the state, school districts and taxpayers would shift to members of the retirement plans as hybrid tier participation grows. The Commonwealth and its taxpayers would be more sheltered from risk, irrespective of market performance. Savings realized from the reform bill would be used to pay down the accrued unfunded liability of the state’s pension system.
“When I became a state representative, I upheld my promise to lead the fight for reform by example and refused to accept a state pension,” Warner said. “Today’s vote was a big step in the right direction. I ask Gov. Tom Wolf to do his part and sign this desperately needed plan into law.”
Senate Bill 1071 is now headed back to the Senate for concurrence.
Representative Ryan Warner
52nd Legislative District
Pennsylvania House of Representatives
Media Contact: Morgan Wagner
mwagner@pahousegop.com
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