A bipartisan plan to alter Pennsylvania pensions passed the state House easily on Monday, by a vote of 150-41.
The plan keeps the state’s defined benefit system for public workers, but introduces a 401(k) component to the plan. Unions are “neutral” on the bill.
Republicans had been pushing for two years to overhaul the state’s pension system to an entirely 401(k)-style system; but it has been a non-starter.
More on the plan, from PennLive:
It would, for Republicans, introduce a 401(k)-style benefit component into the major state retirement plans for state and school employees, which will on some level shift the costs of future recessions away from taxpayers.
For public sector unions and their mostly-Democrat allies, it preserves a guaranteed base pension built on a workers’ years of service and salary.
State Employees Retirement System projections for many of the state’s blue-collar or clerical workers show benefits for a 30-year employee would be virtually unchanged. That was an important enough concession for the largest of the state workers’ unions to take a “neutral” position Monday.
For taxpayers, the plan introduced by Rep. Mike Tobash, R-Schuylkill County, is projected to save an estimated $5 billion in future pension costs over the next 30 years.
That vote inserted a plan negotiated by House leaders into Senate Bill 1071 with significant bipartisan support. Forty-six Democrats voted for the plan, setting the stage for final House passage later this week.
Read the bill here.