Pennsylvania lawmakers get experts’ take on proposed municipal pension fixes

     Harrisburg's skyline as seen from Negley Park. (Lindsay Lazarski/WHYY)

    Harrisburg's skyline as seen from Negley Park. (Lindsay Lazarski/WHYY)

    Stakeholders from the public and private sectors are speaking to the state Senate Finance Committee Thursday.

    At least half a dozen bills dealing with municipal pensions are floating around the legislature right now. But the focus of Thursday’s hearing is expected to be Senate Bill 755.

    Basically, the bill suggests letting municipalities establish defined contribution pension plans for future police and paid firefighters. Currently, they can do so only for non-uniformed workers.

    There’s more to the bill, detailed here.

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    But the point of it all, supporters say, is to save money. 

    That’s because defined contribution plans guarantee payment amounts into pension funds. 

    Municipalities tend to use defined benefit plans, though. Those plans guarantee pension payments to retirees based on their earnings during their working years.

    That’s become problematic over the years as investment returns falter, municipalities skip payments and workforces shrink as retirees live longer and minimum retirement ages stay the same — in some cases to the point where fewer people are paying the fund than getting paid by it.

    Some cities have cut services, sold assets, increased taxes and fees, sought state intervention or contemplated municipal bankruptcy— or anticipate doing so in the near future.

    Meanwhile, residents often end up with missing streetlights, rougher streets and fewer police, despite paying higher taxes and fees.

    The Finance Committee will hear from eight people. They include Easton Mayor Sal Panto, Erie Mayor Joseph Sinnot, Lower Paxton Township Manager George Wolfe and state Auditor General Eugene DePasquale, along with Gerry Cross, who heads the Central region office of the Pennsylvania Economy League (one of a handful of firms typically tapped by the state Department of Community & Economic Development to guide distressed municipalities through their attempted recovery process). Attorney Brian Pinehiro, who specializes in employee benefits law, is also on the agenda. So are Lancaster Chamber of Business & Industry President & CEO Tom Baldrige and Pennsylvania Business Council President & CEO David Patti.

    The hearing started at 9:30 a.m. Follow along as I tweet from the hearing, using the stream below or on Twitter.  (Tweets published in the stream are from oldest to latest.)

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