Jun. 30, 2015
Plan protects both current employees and taxpayers
HARRISBURG – Rep. Ryan Warner (R-Fayette/Westmoreland) today announced the House passed needed reform of the state’s public pension systems. The State Employees' Retirement System (SERS) and the Public School Employees' Retirement System (PSERS) are at risk for failing with an unfunded liability of more than $50 billion.
“The costs of public pensions are overwhelming our state and school district budgets,” Warner said. “Without reform, less and less money will make its way into the classroom and your property taxes will continue to rise with no relief in sight.”
Under the pension reform plan,
Senate Bill 1, state employees, first hired on or after Jan. 1, 2016 and school employees first hired on or after July 1, 2016, will be assigned a hybrid 401(k)-style and cash balance plan. Senate Bill 1 does not take away any benefits already earned by current employees or impact the pension benefits of current retirees.
“Teachers and state employees are not to blame for the broken system, but without reform, the benefits promised to them are in jeopardy and taxpayers are at risk for massive tax increases,” Warner said. “Only four years ago, public pension costs took up t3 percent of the state budget. Four years from now, that number will jump to 10 percent, and will only continue to climb.”
All members of the General Assembly and elected officials will also be moved to the hybrid 401(k)-style and cash balance plan upon election or re-election to a term that begins after Dec. 31, 2015. Future state police, state law enforcement officers and corrections officers are exempt from the hybrid 401(k)-style and cash balance plan under Senate Bill 1, and will remain on their current benefits plan.
“When I became state representative, I lead the fight for reform by example and did not take a state pension,” Warner said. “A non-negotiable component of reform for me was not only moving future employees to a more sustainable plan, but all elected officials as well.”
To address abuses that lead to the “spiking” of pension calculations, the plan also revises the benefits calculation, which will now factor in a state employee’s five-year final average salary.
“I ask Governor Tom Wolf to sign this important plan into law and move Pennsylvania forward. Taxpayers cannot afford the status quo.”
Senate Bill 1 is now headed back to the Senate for concurrence before going to the governor’s desk for a signature.
Representative Ryan Warner
52nd Legislative District
Pennsylvania House of Representatives
Media Contact: Morgan Wagner
717.260.6281
mwagner@pahousegop.com
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