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Proposals To End Municipal Pensions Start To Gain Traction

AP Photo/Matt Rourke

A month after Republican lawmakers advanced a plan to end the traditional pension for new state workers, they’ve set their sights on doing the same for future municipal employees in Pennsylvania.

The cited reason for the change has been repeated in most debates over public pensions: People are living longer, and the annual pension payouts for city retirees are getting harder for municipal governments to afford.

To curb the growth of retirement costs, a coalition of mayors and municipal officials want to switch to 401(k)-style retirement plans for all future hires – including police and firefighters.

Proposals are starting to gain traction after years of lobbying. A House plan passed out of committee this week, and a similar Senate measure is being teed up for consideration.

At a news conference Tuesday, Lancaster Mayor Rick Gray said final passage can’t come soon enough.

“Since I’ve been mayor, our pension contribution has gone from $2 million to $6 million plus annually,” said Gray. “That $4 million, though it might not mean much in the state Capitol, means less police, less firefighters, roads that aren’t paved as well, things that aren’t maintained. It comes out of our general budget.”

Police and firefighter unions are against changes to their future members’ retirement plans. They say a traditional pension is the fairest retirement for workers who can become permanently injured on the job. Democrats are also opposed, citing concerns about retirement security for a unique subset of public workers.

The proposals would not change the pensions of current municipal employees, but it would preclude workers from seeing any increase in retirement benefits.