Pennsylvania Senate Republicans, seeking a way to cut public pension costs immediately, think they might scale back retirement benefits to pre-2001 levels. But, like most old ideas, this one comes with baggage.
GOP Senate Majority Leader Jake Corman (R-Centre) explained his vision on Monday: to cut pension costs in the short-term, revert to past retirement benefits for state workers, before the Legislature passed lavish increases in pensions (and simultaneously let the state take a holiday on paying for them).
This wouldn’t be a claw-back, Corman said: The change would only count for state and school employees going forward. The new calculation for pension benefits would be applied to future, not-yet-earned retirement pay.
“What makes us not have the ability to go back to where we were?” Corman told reporters after an appearance before the Harrisburg Press Club on Monday. “We gave an enhancement … It’s not an impairment of your contract if we just go back to where you were. I believe we can do that.”
But, as pension experts point out, this has been tried before. In 1984, the state Supreme Court struck down a state law that would have forced employees to boost what they paid into their pensions.
Jim McAneny is director of the state Public Employee Retirement Commission, which analyzes pension-related legislation. “The problem is that this has been litigated,” said McAneny. “It’s not my interpretation. I’m telling you what the Supreme Court did in the past. And the whole concept of res judicata — the thing’s been decided.”
The same plan was proposed by former GOP Gov. Tom Corbett. Republican lawmakers rejected the idea because of legal concerns.
Corman said Monday that it’s worth another try. He said he expects his caucus to unveil a bill next month that, in addition to the benefit roll-back, would enroll future state hires into a 401(k)-style retirement system.