Pa. House committees to vet proposed pension reforms
The state House Finance and State Government committees will hold a joint hearing next week to discuss several proposals to reform the public pension system.
The 1 p.m. hearing Aug. 14 will be held in Room 140 of the Main Capitol.
In June, Chester County Republican Rep. Warren Kampf introduced twin bills that would move state pensions toward market-driven 401(k) plans. House Bill 2453 would make changes for state employees. HB 2454 would address school district employees.
The bills would most immediately address the expansion of pension plans by requiring all new state and school employees to be enrolled in defined contribution plans, such as 401(k) plans, that shift more burden of paying for it onto the employee.
The state's contribution to the new plans would be set at a 4 percent match, Kampf said.
Existing employees would then be incentivized to freeze their pension and move to the new plan with the lure of a 7 percent state match and the ability to manage the account's investment options, he said.
Kampf's bills are among nine House proposals listed on the meeting schedule.
Last month, Moody's Investors Service downgraded Pennsylvania's general obligation debt to Aa2 from Aa1, citing concerns about the state's growing unfunded pension liabilities and a slow economic recovery.
The unfunded actuarial accrued liability at PSERS was $26.5 billion at the close of the fiscal year that ended June 30, 2011, according to its most recent actuarial valuation report. The SERS liability was $14.7 billion as of Dec. 31, 2011, according to its most recent report.