Reed Votes to Reform Commonwealth’s Pension System
HARRISBURG – Rep. Dave Reed (R-Indiana) today voted to reform Pennsylvania’s public pension systems, as
Senate Bill 1 passed the House today by a 106-89 vote.
“This plan preserves the Commonwealth’s pension system and preserves pension payments for retirees, and allows current employees to keep their current benefit structure,” Reed said. “This is a responsible solution which will save the state more than $10 billion over the course of the next 30 years.”
The legislation establishes that all new employees who enter either the State Employees’ Retirement System (SERS) or Public School Employees’ Retirement System (PSERS) would be enrolled in a combination of 401(K)-type and cash balance pension plan.
According to Reed, legislators will lead by example in this pension reform plan. All legislators, including incumbents, elected in 2016 will be part of the new retirement plan being provided to new employees going forward.
The pension changes are necessary due to an unfunded liability of at least $50 billion, which represents the difference between the amount of benefits promised and revenues and assets available to provide for that promise. This disparity was worsened by the “Great Recession,” which greatly affected the systems’ revenue stream.
“Rapidly increasing pension costs are driving up school property taxes beyond what many families can afford,” Reed said. “Reforming the system could help alleviate future property tax increases while ensuring current members of the pension systems receive the benefits they earned, and stabilize the system to protect all Pennsylvania taxpayers.”
The bill now goes to the governor for his consideration.
Representative Dave Reed
62nd District
Pennsylvania House of Representatives
Media Contact: Nick Ruffner
717.260.6258
nruffner@pahousegop.com
RepDaveReed.net /
Facebook.com/RepReed