HARRISBURG – Senator Camera Bartolotta (R-46) today praised Senate passage of a historic pension reform bill that will continue to provide competitive retirement benefits for employees while limiting future costs to taxpayers.
“The pension crisis is one of the most serious public policy problems confronting Pennsylvania. It is the main reason why local taxpayers are seeing massive increases in property taxes, and it prevents the hundreds of millions of new dollars we’ve invested in education from actually reaching the classroom,” Bartolotta said. “This legislation is one of the most comprehensive pension reform packages in the country, and it protects taxpayers from billions of dollars of financial risks while still providing a predictable, reliable and sustainable plan moving forward.
Senate Bill 1 would not affect retirement benefits for those who are already retired or current public-sector employees. The legislation would provide newly hired employees with different retirement options to suit each individual employee’s needs, including a defined contribution plan that is similar to the 401(k) plans offered by most employers in the private sector.
New employees could also choose between two hybrid options that offer a smaller defined benefit plan than the current system, in addition to a defined contribution component.
It is estimated that the plan will save taxpayers more than $5 billion over the next 30 years, and investment management fees would be targeted for a reduction of an additional $3 billion. Because the reforms shift risks away from taxpayers, the plan could ultimately save taxpayers $20 billion or more if state investments fail to meet projections, Bartolotta said.
Additional details about Senate Bill 1 are available here.
CONTACT: Katrina Anderson (717) 787-1463