Pa. treasurer McCord, Keystone Research Center to talk pension plan
In the first in a series of pension primers from the Keystone Research Center, state Treasurer Rob McCord and center Executive Director Stephen Herzenberg will discuss the governor's pension reform proposal on Tuesday.
A big piece of Gov. Tom Corbett’s plan calls for a move to defined-contribution plans for new state employees. That would actually increase costs for the state, school districts and, ultimately, taxpayers, according to the liberal-leaning KRC.
The KRC will argue the transition to a 401(k)-style plan will do nothing to address the current pension debt, according to a news release. It will add to the problem over time, the center said.
The current unfunded liability of the two state-administered pension plans is more than $44 billion.
Democrats largely support maintaining the current defined-benefit system, which was modified in 2010 with Act 120.
That reform act helped address an anticipated spike in pension costs by “smoothing” the increases over a long period of time. That law also reduced benefits for new hires.