Gov. Tom Wolf’s administration fired a new volley Monday against a Senate Republican bill to overhaul benefits in Pennsylvania’s two big public employee pension systems.
Gov. Tom Wolf’s administration fired a new volley Monday against a Senate Republican bill to overhaul benefits in Pennsylvania’s two big public employee pension systems, saying that they voted to line their own pockets.
A Senate Republican spokeswoman countered that the administration is using a selective, salary-based argument.
Although lawmakers have a history of giving themselves a cushier pension benefit, the Senate GOP says the bill gives lawmakers no special treatment and actually reduces their benefits.
In any case, Wolf, a Democrat, has said that the Senate GOP bill lacks fairness for workers as both sides advance their own plans to blunt the effect of rising pension obligation payments.
In a speech Monday at a Pennsylvania Press Club luncheon, Wolf’s chief of staff, Katie McGinty, lambasted the Senate GOP bill as unfair to taxpayers and other public employees.
“It is a huge and, I’m sure to taxpayers, unacceptable, lavish payout to legislators,” McGinty said. “The legislators who voted for this voted to line their own retirement pocket with a payout that is 2.5 times the pension benefit that will be earned by the average Joe, the average employee.”
The bill, she added, allowed lawmakers to avoid a key, money-saving concession that many of the 370,000 current state government and public school employees will be asked to make.
Overall, the bill would end the traditional pension benefit for future employees and replace it with a 401(k)-style plan and a cash balance plan. Today’s retirees would be unaffected, while Democrats say the bill’s key money-saving provision — requiring many current employees to pay a higher portion of their paychecks to keep their current benefit level — is unconstitutional.
A Senate GOP spokeswoman, Jennifer Kocher, said the bill would immediately shave down the traditional pension benefit for lawmakers to the lower benefit accrual rate of 2 percent — or 2.5 percent with a higher employee contribution — allowed under a 2010 law. Once a lawmaker is elected or re-elected, they would enter a new benefit scheme, earning a 4 percent employer contribution into a 401(k)-style plan, like other newly hired state government employees. Newly hired public school employees would enter a 401(k)-style plan with a 2.6 percent employer contribution.
Lawmakers earn a base salary of about $85,300 in 2015, well above the average salary of a state government or public school employee.
The Senate Republicans’ bill passed last Wednesday, without a hearing five days after it was introduced. Every Democratic senator opposed it, along with one Republican. It is scheduled for a June 4 hearing in front of the House State Government Committee.