Jun. 30, 2015

HARRISBURG – Rep. Doyle Heffley (R-Carbon) today voted with the majority of his House colleagues to approve legislation (Senate Bill 1) that would reform Pennsylvania’s pension systems.

“The Commonwealth’s two state pension systems are currently more than $50 billion in debt. It would cost each Pennsylvania household $13,000 to eliminate this debt today. Without significant legislative action to address this problem, taxpayers will be forced to pick up the growing tab, property taxes will continue to rise and state spending on core government functions – including payments to public school and state employees’ pensions – will be in jeopardy,” Heffley said.

Senate Bill 1 would not affect current retirees’ benefits. Current public school and state employees would keep their current pension plans; however, their final average salary would be calculated in a manner intended to prevent artificial spiking of retirement compensation, and the portion of lump-sum retirement payments derived from future service would be adjusted to eliminate an interest rate bonus provided under current law. The legislation does not affect state police, state law enforcement officers and corrections officers.

Beginning next year, new state employees would be provided with hybrid 401(k)-style and cash balance plans. All House and Senate members, including incumbents, would move to hybrid 401(k)-style and cash balance plans upon election or re-election.

“This plan begins to address the structural issues with public school and state employees’ pensions, including legislators’ pensions, which are driving up costs in the state budget and in school districts’ budgets across the Commonwealth. These reforms are necessary to ensure that current retirees, as well as current and future employees, are able to enjoy a fair and competitive retirement.”

The plan is projected to save taxpayers more than $10 billion over 30 years by taking steps to shift away from taxpayers the risk associated with having to fund the state’s growing unfunded pension liability.

Having passed both the House and Senate, the bill now goes to the governor’s desk for his signature.

Representative Doyle Heffley
122nd District
Pennsylvania House of Representatives

Media Contact: Jonathan Anzur
RepHeffley.com / Facebook.com/RepHeffley