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Critics: State Pension Bill Would Make New Hires Pay for Past Mistakes

Negotiations on public employee pension reform remain stalled.  Credit: Ad Meskens/
Negotiations on public employee pension reform remain stalled. Credit: Ad Meskens/
October 1, 2015

HARRISBURG, Pa. – Gov. Tom Wolf this summer vetoed a bill that would have radically altered the public employees' pension fund, but Republican state senators say they're still committed to the bill.

Negotiations on a compromise remain stalled.

Economist Stephen Herzenberg, who heads the Keystone Research Center, says if adopted in its current form, Senate Bill 1 would hurt new hires to the state workforce.

"The Senate Republican pension proposal would give teachers, nurses and other public servants in Pennsylvania the lowest retirement benefits of any large public pension plan in the country," he stresses.

According to a Pension Primer prepared by the research center, even with improvements, SB 1 would cut benefits by up to two-thirds for career workers, leaving many with annual benefits of less than $10,000.

Herzenberg says college educated public employees already are being paid more than 25 percent less than their counterparts in the private sector.

"If you add to that retirement benefits that are lower than the private sector, why are you going to be able to attract good folks?” he asks. “Why are mid-career people going to stay?"

Some provisions of SB 1 would apply to current employees, but the biggest impact would be on pensions for people just entering the workforce.

Wolf has indicated a willingness to compromise on several issues in the current budget impasse, including pensions. But according to Herzenberg, so far the governor is holding firm on maintaining a pension fund that works for all state employees.

"When we get a pension compromise, it will be one that makes sense,” Herzenberg states. “It won't be one like SB 1 that would hurt taxpayers, public employees and state agencies."

The Keystone Research Center's analysis finds that despite the reduced benefits paid to public employees under SB 1, it would provide no meaningful savings to taxpayers.

Andrea Sears, Public News Service - PA