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Senate GOP Readies For Another Assault On The Pension Problem

Gov. Tom Wolf speaks to the House of Representatives at the state capitol building in Harrisburg on March 3, 2015.

One of Harrisburg’s perennial headaches is heading back to the legislative spotlight as Senate Republican leaders work to push a familiar pension bill through the chamber.

Last session, GOP lawmakers made a late-in-the-game attempt to pass a pension overhaul that would have offered state employees three retirement options—two so-called “hybrid” plans, and a 401k-style plan.

At the time, Governor Tom Wolf indicated he’d sign it. But the plan didn’t get full votes because House and Senate Democrats refused to support it, saying they hadn’t gotten enough input.

Now, a virtually identical proposal is back. The only change is a new option for employees on the older-style pension plans to jump onto the new one.

House Democratic spokesman Bill Patton said his caucus thinks the proposal would be worse than the current pension system, which has been in place since 2010.

“For any bill to deserve and win our support, pension changes must save money for the state rather than raising costs, as this plan would,” he said. “And it must pay down the pension debt measurably faster than the law that’s already in effect.”

In a separate interview, Senate GOP spokeswoman Jenn Kocher countered that it’s time for the Senate Democrats to compromise on a bill that actually has a shot at passing.

“Do you just talk about it and never actually vote in favor of something that will move the ball forward—something that the governor actually says he will sign?” she asked. “That’s something that the Democrats need to ask themselves.”

Kocher said the main goal of the Senate’s plan is to lower the state’s $70 billion unfunded pension liability, and shift risk away from taxpayers and onto the state workers receiving the pensions.

An Independent Fiscal Office analysis of last session’s iteration found that on both counts, the plan would have only limited impact—it would save only about $3 billion, and wouldn’t affect the risk for two decades.

Kocher says that still makes it worthwhile. But Democrats have argued there’s not enough benefit to justify the plan’s cuts to employee pensions. 

In a statement, Wolf spokesman JJ Abbott said the governor is “committed to a solution that pays down our billions in debt, significantly reduces long-term costs to the taxpayer, and provides retirement security for teachers, nurses, and other employees.”

Abbott added that the governor “also remains hopeful that the General Assembly will work with him to reduce unnecessary and excessive fees paid to Wall Street money managers.”