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New municipal pension bill surfacing in state Senate

A new municipal pension reform bill targeting public safety may soon surface in the state Senate.

Sen. John Eichelberger (R-Blair) began circulating a co-sponsorship memorandum Tuesday that would move new police and fire department hires to a defined-contribution plan, or 401(k)-style system.

Municipal pension debt in Pennsylvania is about $8 billion, with most of that tied to Philadelphia and Pittsburgh.

In 66 of Pennsylvania’s 67 counties, at least one municipality has a pension plan that is at a high level of fiscal distress, Eichelberger noted.

And public safety costs, in many cases, are consuming 50 percent to 70 percent of municipal budgets.

Eichelberger’s proposal also would remove pensions from the collective bargaining process and eliminate salary “spiking,” which occurs when final base pay calculations include overtime hours and unused sick and vacation days.

In addition, Eichelberger intends to include an option 457 plan, or tax-exempt deferred compensation plan, as an additional employee retirement tool.

Last month, a cash-balance hybrid plan for local governments was introduced in the state House by Rep. Keith Greiner (R-Lancaster).

There also are proposals circulating to create a statewide retirement system for police officers.

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