CAP notes the bill calls for new state workers and public school teachers to enroll in a defined contribution type plan similar to the 401Ks most of us have. They also have an option to enroll in a cash balance plan which are like savings accounts with a interest rate equal to a 30-year US Treasury Bond with a cap at 4 percent.
New employees would not be eligible for the existing defined benefit plan.
Existing employees would be prevented from spiking their average salary during their final years to hike their pension by maxing out on overtime. It would also change how future benefits are calculated for employees in the current system and require increased employee contributions.
It is estimated that the reforms would save the taxpayers $1.7 billion over the next four years and a total savings of $18 billion.
The bill is now before the House.
Kudos but why wasn’t this done four years ago when the GOP ran everything? Expect our Democrat governor, Tom Wolf, to do what he can to gut it as the unions basically own him.
And, really, the morality of someone making a $477,591 public pension must be addressed before asking the working class and those down on the luck to bail out the system.
Hat tip Lisa Esler.