Pension reform for new hires, not current workers - abc27 WHTM

Pension reform for new hires, not current workers

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Future pension benefits for current state workers and public school teachers are out of the legislative crosshairs.

A Senate committee on Wednesday altered a plan favored by Governor Tom Corbett that would tweak future entitlements for current employees. The votes just weren't there in the Senate.

But Senate Bill 922, authored by Finance Committee chairman Mike Brubaker (R-Lancaster), would convert new hires after 2015 out of the current defined benefit plan and into a defined contribution plan, similar to a 401(k) plan.

Senator Richard Alloway (R-Franklin/Adams/York) supports Brubaker's attempt.

"Every previous legislature has continued to kick this can down the road and not deal with this problem," Alloway said. "It needs to be dealt with and now's the time to deal with it because it's only gonna get worse."

Critics say the plan is a band-aid on a gunshot wound because it doesn't fix an estimated $47 billion unfunded liability for the pensions of current workers that are guaranteed by taxpayers.

"I hear from my constituents all the time that they want government officials, teachers, and others to be paid adequately and have parallel benefits, but not superior benefits," Brubaker said.

Many analysts say the math doesn't add up. They insist that shifting new workers to a defined contribution plan will actually cost the state more because they're no longer part of the pool paying for retirees.

House minority leader Frank Dermody is opposed.

"This does not work and it costs the commonwealth billions of dollars," said Dermody. "When you do that, you no longer have people contributing into the pension fund. To me, it makes no sense and it's not good for the taxpayers and it's not good for retirees."

Brubaker says after doing hundreds of hours of interviews on the topic, he disagrees with the naysayers.

"With all due respect, they're wrong," Brubaker said. "They're using logic that works other places. It does not work here."

Brubaker said the argument works in the case of Social Security, where one generation of younger workers fund the previous generation of retiring, older workers. But Brubaker said that's not the case with Pennsylvania's public employee pensions, where taxpayers are picking up the slack for the retiring generation, not other workers.

"The new people are not paying for the people going out," he said.

Brubaker's bill would also put all elected officials, who take office after 2015, into the new plan - no more sweetheart pensions for them.

"It's the right thing to do," Brubaker said. "If we're gonna force other employees to leave a plan that we're in, we need to leave the plan as well."

Brubaker previously announced he will not seek re-election. His bill squeaked out of committee on a 6-5 vote and its future is uncertain, but I asked Brubaker if the provision downgrading pension benefits for lawmakers would kill it. He smiled and had a ready response.

"I'd like to see a member put up a vote saying I'm not gonna vote for pension reform because I want to keep a defined benefit plan that 80 or 90 percent of the public doesn't have," he said. "I'd like to see that happen."

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