Governor Tom Wolf has signed a bill to restructure Pennsylvania’s heavily indebted public pension system. It’s designed to shift some financial risk away from taxpayers.
As Wolf readied his pen, the large, bipartisan group of lawmakers gathered around him gave themselves a round of applause.
The agreement they’d settled on was a long time coming — it was finally introduced last week after about five years of failed negotiations.
Beginning in 2019 it will switch the commonwealth’s defined benefit public pensions for new hires to a stacked menu of new plans, including a 401(k)-style one, and two hybrids.
The plan doesn’t impact the roughly $70 billion unfunded pension liability and actually costs a little more in the short-term, which led some lawmakers and others to write it off as a waste of time.
Asked if further action is needed, Governor Tom Wolf said he thinks the state’s already on the right track in paying down the debt.
“What’s next,” he said, “is we pay our bills.”
The legislature now turns its attention to another weighty problem: figuring out how to balance the commonwealth’s budget, which is due at the end of the month.
Wolf tentatively predicted that getting a pension bill passed bodes well.
“It always helps to have big issues that might be a point of friction off the table,” he said.