Lawmaker Presents Alternative Plan for State's Pension Debt
A state House Republican is presenting a plan to deal with the state’s growing public pension debt.
The proposal by Cumberland County Representative Glen Grell differs significantly from ones offered by the Corbett administration and Republicans in the Legislature by making potential benefit reductions optional for current employees.
It relies heavily on borrowing to bring down pension payments scheduled to eat away at state and school district budgets, a move viewed with skepticism by the Corbett administration.
But Grell said it shows the state is willing to make up for years of paying less into the public pension funds.
"I can’t go with a straight face to any current employee who’s been paying 7-and-a-half percent or six-and-a-quarter percent into this fund and say, ‘We need you to make a concession’ unless I’m able to deliver on the making up for that 10 years of underfunding," Grell said. "So I think I would get zero percent take up on current member changes if we didn’t have the borrowing to help make up for that past underfunding."
The proposal would also enroll future state and public school employees into a new kind of pension plan, a hybrid of the traditional plan and the 401k-style plans seen in the private sector.
Grell said such an approach would not bring the same costs as transitioning to a 401k-style plan.