Harrisburg – State Senator Tom McGarrigle (R-26) supported passage today of an historic pension reform measure that will protect benefits earned by retirees and current employees while shielding taxpayers from further risk.
Senate Bill 1, which McGarrigle co-sponsored, would reduce long-term costs to taxpayers by creating a 401k-style pension system for newly hired employees who are eligible to participate in one of the state’s two public employee pension systems – the State Employees’ Retirement System and the Public School Employees’ Retirement System.
The bill would not affect benefits already earned by current employees or retirees. However, current employees would be given the option to either increase their contribution rate or accept a reduced benefit going forward. Retirees would not be affected by Senate Bill 1.
“Rising pension costs are the main reason for school property tax increases and program cuts. These costs have become an unsustainable burden for local taxpayers, state taxpayers and schools,” said McGarrigle. “This legislation protects the benefits earned by current employees and retirees, and helps to shield taxpayers from the risk associated with the pension funds.”
A non-partisan analysis by the Public Employee Retirement Commission determined the measure would save $18.3 billion over the next 30 years.
The bill would require lawmakers to participate in the same pension system as newly hired employees. It also creates a new commission to study investment options and fees associated with managing pension system assets.
Senate Bill 1 was sent to the House of Representatives for consideration.
CONTACT: Alex Charlton