HARRISBURG – State Reps. Matt Gabler (R-Clearfield/Elk) and Tommy Sankey (R-Clearfield/Cambria) voted Tuesday with a bipartisan majority in the Pennsylvania House of Representatives to pass legislation that will reform the state’s public sector pension plans for future state and school district employees in the Commonwealth.
Senate Bill 1071, which passed the House by a vote of 136-59, would create a stacked-hybrid pension plan for future employees while preserving the current defined benefit system for current retirees and current employees who will see no change in their benefits.
Gabler and Sankey, both of whom do not participate in the State Employees Retirement System, released the following statement upon passage of the bill, which now moves to the Senate for concurrence:
“The single largest challenge Pennsylvania’s state government and public school districts face is the extreme growth in the cost of our pension systems, leading to increasingly difficult budgets and painful tax bills.
“Addressing the pension crisis is the most important thing we can do to save taxpayers’ money and place our state on a solid financial footing for our children and grandchildren.
“The reforms contained in Senate Bill 1071 save taxpayers $5 billion while making no changes to the benefits of current retirees and current employees.
“The legislation creates a competitive, generous, and sustainable retirement program for future employees, which contains a defined benefit element to provide retirement security for all employees based on their first $50,000 of income while providing a defined contribution plan for all income over $50,000 per year.
“The defined contribution element in this plan is a huge improvement for future employees in the modern workforce environment, because it provides the element of portability – a plan that workers can take with them when they change careers, which happens much more frequently today than it did 10 or 20 years ago.
“Implementing these changes will help address school district costs in a huge way, benefitting property taxpayers across Pennsylvania. Without taking any benefits from current retirees or employees, this plan will enable us to strengthen and shore up our current pension program which is in crisis.
“It will directly benefit the children of our Commonwealth by reducing the amount of debt they will inherit as taxpayers. Most importantly, this plan will enable more of taxpayers’ hard-earned money to reach the classroom without being diverted to pay for a broken pension system. It will strengthen our public schools and improve the education our students receive.”