Pension reform bill passes in state Senate

On Monday, June 5, the Pennsylvania state Senate passed Senate Bill 1, a bipartisan pension reform bill that is expected to make its way through the House and to Governor Tom Wolf’s desk for signature.

SB 1 is a hybrid pension proposal that would go into effect beginning January 1, 2019, for new employees in the State Employees Retirement System (SERS), and July 1, 2019, for those in the Public School Employees Retirement System (PSERS). It would have no negative effects on current employees and retirees.

AFSCME Council 13 has worked tirelessly with Governor Wolf and the General Assembly to ensure that current employees’ pensions are unaffected, and that new employees will have access to a defined benefit pension plan.

Under SB 1, employees hired before July 1, 2011, would see no impact on their retirement benefits. Employees hired after June 30, 2011 (Act 120 employees), would not be negatively affected, and would actually see a couple of positive effects. New employees would have a choice from three new plan designs (See Key Points below for more details).

Council 13 believes that continuing with Act 120 makes better fiscal sense, but views SB 1 as preferable to many past proposals that would have completely jeopardized retirement security for AFSCME members and retirees.

“Ultimately, this proposal may be as good as it gets with a Republican-controlled legislature that has constantly been going after pension reform. While we believe Act 120 should have been allowed to continue to work, SB 1 will allow current employees to keep their plans and new employees will still have retirement security, which is a plan we can live with,” Executive Director David Fillman said.

“And with the 2018 governor’s race rapidly approaching, it will be helpful to address the pension issue and allow the state budget to move along instead of it becoming a campaign issue.”

Governor Wolf views SB 1 as a proposal that will protect retirement security, shift future risk away from taxpayers and speed up the process of passing a state budget, and is expected to sign the bill for those reasons.

More information will become available as the bill moves through the House this week, where it is scheduled for a vote on Thursday. Council 13 will continue to monitor the situation closely, and will continue to defend retirement security for Pennsylvania’s public employees.

For Key Points for SERS, click here.

For Key Points for PSERS, click here.