Senate Bill 1 pension reform likely to include defined contribution plan

Pension reform has been given the key moniker of Senate Bill 1 and will likely take the form of a defined contribution plan, a key player in the process told The PLS Reporter this week.

During Tuesday’s swearing-in day ceremonies in the Senate, newly re-elected President Pro Tempore Joe Scarnati (R-Jefferson) raised the prospects of pension reform legislation to a new level by declaring a pension reform bill will take on the prestigious title of Senate Bill 1, a more-than-symbolic gesture emphasizing the importance of the issue to the Senate.

“Moving the state pension system more in line with that of the private sector is one of the most significant means we have to gain more revenue, for needs like education,” Sen. Scarnati stated during Tuesday’s ceremony. “Pension reform will be Senate Bill 1 and a top priority this session.”

According to Sen. Pat Browne (R-Lehigh), a longtime pensionphile and current chairman of the Senate Appropriations Committee, the pension reforms included in the bill are likely to include a shift to a defined contribution plan from the current defined benefit plan.

“I would expect that its platform would include a defined contribution plan for new school district and state workers as the foundation of the proposal,” he told The PLS Reporter.

He noted the proposal has not yet been introduced and portions are still a work in progress.

“We’re working on it, we’re going to try to receive as much input from our caucus members as possible to try to structure it,” he said.

Noting pension reform proposals last session were unable to pass both chambers, Sen. Browne said the Senate will be working with House colleagues to find a workable proposal.

“We’re always willing to work in a collaborative fashion to try to come up with a final package,” he said.

However, he argued, the best way to protect the General Fund and taxpayers going forward with the least possibility of adding debt to be sustained in the pension plan is through a defined contribution plan.

“The best way to accommodate that is through a defined contribution platform because it does not allow for the ability of unfunded accrued debt going forward,” he explained.

By press time Thursday, Senate Democratic leadership did not provide a requested response.

Source: The PLS Reporter