Jun. 08, 2017

HARRISBURG - The Pennsylvania House of Representatives has approved legislation to reform Pennsylvania’s struggling public pension today with Rep. Rick Saccone (R-Washington/Allegheny) voting in favor of Senate Bill 1, as he believes it’s the start to shifting the risk away from taxpayers.

“This bill will help lift a tremendous burden on our taxpayers,” said Saccone. “The pension system has been crippling the Commonwealth for decades. The legislation the House passed today will provide a significant shift in risk from the taxpayer to the individual, as the pension systems now move to the private sector.”

Senate Bill 1 will impact all state employees hired after Jan. 1, 2019, and all teachers hired after July 1, 2019.

The bill will move all newly hired public employees off the pension plan that is mostly funded by taxpayers. It would give workers the option of choosing between the following three retirement systems: 

  • A side-by-side defined benefit/defined contribution hybrid plan with a 1 percent accrual rate.

  • A side-by-side defined benefit/defined contribution hybrid plan with a 1.25 percent accrual rate (this will be the default plan if no election is made by the employee).

  • A defined contribution-only option.

This historic plan will save more than $5 billion over the long term. An additional savings of up to $3 billion is projected in terms of reduced costs and fees for investment management.

“This is not the end of needed reform, but it is a big win for taxpayers,” said Saccone.

Pennsylvania’s pension crisis contributed to the state’s credit bond rating reductions and threatened its fiscal stability. This public pension reform looks to the future as it protects the Commonwealth’s interests and puts the systems on a sustainable path going forward.

“This plan is step one in implementing meaningful pension reform,” said Saccone. “It helps stop the bleeding from within the current system and will help reduce annual taxpayer contributions over time.”

The defined contribution plan is portable, meaning employees can take their plan with them if they leave state employment before retirement.

“This is a huge step for Pennsylvania,” said Saccone. “This will allow us to put more money into education, infrastructure and resources for our first responders. I am proud to say Republicans in the Pennsylvania House have led on this issue for several years. Now with the cooperation of House and Senate, it will force the governor to finally sign a pension bill after vetoing our plan last session.”

With the House voting 143 to 53, the bill now heads to Gov. Tom Wolf for his signature.

For more information on Saccone, visit RepSaccone.com or facebook.com/RepSaccone.

Representative Rick Saccone
39th District
Pennsylvania House of Representatives
Media Contact: Mike Madry
717.260.6587
mmadry@pahousegop.com
RepSaccone.com / Facebook.com/RepSaccone


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