In Pennsylvania, Philadelphia Likely To Be Left Out of Any State-Wide Reforms

A group of Pennsylvania lawmakers have been trying, unsuccessfully, for over a year to pass a number of pension-related bills that aim to switch new state hires into a plan that more resembles a 401(k) than a traditional defined benefit pension.

Those bills, or any like them, are unlikely to get past the governor’s desk as Gov. Tom Wolf has vowed to veto any reforms that attempt to incorporate a 401(k) structure in the state pension system.

But if such reforms were to somehow become law, it’s likely that Philadelphia – a city that sports one of the most underfunded pension systems in the country – would be excluded from any changes.

More from Philly.com:

Legislators in Harrisburg are considering two bills that would require municipalities to enroll new employees in a new type of pension plan, similar to a 401(K). Both bills, as currently written, exclude Philadelphia…

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So, why not include the municipality with the most severely underfunded pension plan in the state?

“If we added Philly into the mix, it would be a very heavy lift,” Greiner said Wednesday, adding that Philadelphia’s pension system is very complex.

Philadelphia “wasn’t purposefully left out,” said Lee Derr, executive director of the Senate Local Government Committee and Eichelberger’s chief of staff. “It was never brought up as an issue.”

League of Municipalities executive director Rick Schuettler said because Philadelphia is a first class city, a state governing designation applied to cities with over 1 million residents (Philadelphia is the only one in the state), it has a different pension structure than the rest of the state.

“It would be a huge task to try to include Philadelphia,” in the pension reform bills, Schuettler said. “You could do it separately.”

Philadelphia is currently shouldering a $5.7 billion pension deficit.

Photo credit: “GardenStreetBridgeSchuylkillRiverSkylinePhiladelphiaPennsylvania” by Massimo Catarinella – Own work. Licensed under CC BY 3.0 via Wikimedia Commons