Pension reform has potential $37B extra cost
HARRISBURG — Reports showing a proposed pension reform plan could add as much as $37 billion in costs could stymie efforts by Republicans to move future employees into 401(k)-style plans.
An analysis by the Public School Employee Retirement System pegged the added cost of a House plan by Rep. Warren Kampf, R-Montgomery County, at about $33.8 billion. And a report by the State Employee Retirement System found a similar measure would cost that system about $3.2 billion more. Both have billions of dollars in unfunded liabilities now.
“There is considerable support in principle to moving future employees to a defined-contribution plan,” said Rep. Glen Grell, R-Cumberland County. “However, anyone looking at those possible costs would have to take a second look because I don’t think many members want to do something that would cost these systems 30-plus billion dollars considering they already have considerable unfunded liability.”
Gov. Tom Corbett and Senate Majority Leader Dominic Pileggi, R-Delaware County, say they support a plan from Sen. Mike Brubaker, R-Lancaster County, that would place elected officials, once re-elected, in 401(k)-style pension plans along with new state employees. No cost analysis has been released for Brubaker’s plan.
Grell, who has been deeply involved in pension reform, said he thinks a compromise by June 30 is unlikely. But House Republican spokesman Steve Miskin said, “Absolutely, it’s possible.”
Staff writer Tom Fontaine and Pennsylvania Legislative Correspondents Association intern Josh Fatzick contributed to this report. Kari Andren is a staff writer for Trib Total Media.