A Pennsylvania Senate committee has approved a scaled-down version of Gov. Tom Corbett’s plan to address the commonwealth’s pension debt.
It would enroll most future state and public school employees into a 401(k)-style retirement plan, rather than the defined-benefit pension plan current workers have.
The change reduces the risk that the state’s pension debt will grow, because fewer employees will be added to it, according to Sen. Pat Browne, R-Lehigh, who has long worked on pension issues,
“There’s only a small percentage of states that have been able to shift the platform to a defined contribution platform. There’s only three in the entire country,” said Browne. “That makes this move, notwithstanding the changes in the bill, extraordinarily significant and a major policy move on our behalf.”
Some say the change wouldn’t address the commonwealth’s growing $47 billion pension debt and the rising payments necessary to reduce it.
Democrats oppose the bill, saying the switch would incur additional costs.
Future police and public safety workers still would be enrolled in the existing defined-benefit pension plan.
At a hearing this week, the governor’s budget secretary told lawmakers to approve this single piece of the larger plan “if nothing else.”