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PA Governor Signs Pension Overhaul Into Law

HARRISBURG (WSKG) — Governor Tom Wolf has signed a bill to restructure Pennsylvania’s heavily indebted public pension system. It’s designed to shift some financial risk away from taxpayers.  As Wolf readied his pen, the large, bipartisan group of lawmakers gathered around him gave themselves a round of applause. The agreement they’d settled on was a long time coming–it was finally introduced last week after about five years of failed negotiations. Beginning in 2019 it will switch the commonwealth’s defined benefit public pensions for new hires to a stacked menu of new plans, including a 401(k)-style one, and two hybrids.  The plan doesn’t impact the roughly $70 billion unfunded pension liability and actually costs a little more in the short-term, which led some lawmakers and others to write it off as a waste of time. Asked if further action is needed, Governor Tom Wolf said he thinks the state’s already on the right track in paying down the debt.

For Some PA Lawmakers, Latest Pension Bill Good Enough

HARRISBURG (WSKG) — Thanks to months of behind-the-scenes negotiation, a significant pension bill is on a fast track through the state legislature. It easily passed the Senate Monday, though even its supporters acknowledge that it doesn’t come close to fully fixing Pennsylvania’s pension woes.  The commonwealth is carrying about $70 billion in unpaid pension debts, and the costs of paying it off have put significant strain on the state’s budget, as well as school districts’ spending plans. The proposal now being considered wouldn’t reduce unfunded liability or pay it off more quickly. It would, however, change the current pension structure to a tiered 401(k)-style plan, which benefits the state because if investment returns are bad, state employees would bear the financial strain–not the state itself. Several senators, like Lackawanna County Democrat John Blake, spoke on the floor to lament the fact that the measure doesn’t generate any savings.

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PA Senate Moves A New (But Familiar) Pension Overhaul

HARRISBURG (WSKG) — State senators gathered in the Capitol on Sunday evening to move a bill that’s been dogging the legislature for the last four years, in various forms.  It would rework the structure of the state’s two heavily indebted public pension systems, a change the bill’s supporters say mitigates risk to taxpayers. However, the proposal does little to reduce the state’s massive pension debt. Like several previous GOP pension proposals, it would shift the state’s retirement plan to a three-tiered 401-k-style system–effectively reducing benefits for new hires. That doesn’t save significant dollars. And the Independent Fiscal Office reported that costs would actually increase slightly in the near term.