The Pennsylvania panel charged with vetting public pension changes estimates that one alternative to Gov. Tom Corbett’s preferred plan could save the commonwealth about $30 billion over 30 years.
The “cash-balance” pension would effectively cut retirement benefits in half for future workers. It calls for other moves controversial among fiscal conservatives – such as paying less toward the overall pension debt and borrowing, which is seen as very risky.
The measure may need some tweaking, but sponsor Rep. Glenn Grell, R-Cumberland said he thinks it’s worth lawmakers’ consideration.
“I think this does advance the conversation,” Grell said Wednesday. “I think it does show, though, that simply looking at new plan design is not going to get us there.”
A different overhaul proposal favored by the Corbett administration would affect only plan design by changing and reducing retirement benefits for future hires.
That plan is estimated to save $11 billion over 30 years, but it has been stalled in the state Legislature for months.
The state owes about $50 billion to its pension funds for school and state employees.