A day after a new pension reform proposal was rolled out in Harrisburg, the liberal-leaning Keystone Research Center today will release a report on the potential dangers of cash balance plans.
Cumberland County Republican Rep. Glen Grell on Monday presented an overview of two bills he plans to introduce this month to address the commonwealth’s pension woes. One of those bills would create a cash balance option — a new tier to the existing defined-benefit plans — for new state hires.
The two public sector retirement systems have more than $47 billion in combined debt.
Grell’s projections have the unfunded liability shrinking by as much as $37 billion over the next 30 years. His plan, which includes up to $9 billion in bond financing to address 10 years of underfunding by the state, also would provide short-term relief to the state’s general fund, while allowing savings to school districts and other state agencies.
The KRC’s executive director, Stephen Herzenberg, will release the report at 11:30 a.m. While cash balance plans represent a shift away from dangerous 401(k)-type proposals that would cost Pennsylvania taxpayers $40 billion over the course of 30 years, many questions remain for taxpayers and public workers, according to the KRC.
The report will outline how cash balance plans could dig a deeper pension hole for taxpayers while leading teachers, police officers, nurses, and others away from careers in public service.