This year has proved to be a more civil one in the Pennsylvania legislature than 2015. The Republican-led General Assembly passed a final budget and Democratic Gov.Tom Wolf allowed it to become law rather than vetoing it like he did last July. However, pension reform legislation is now on hold until the fall, set aside most likely for after election season.
We reported in June that the House had passed its own amended version of SB 1071, a pension bill intended to turn around the state’s unfunded pension liability problems by shifting cost burdens from the state to participants through the adoption of a hybrid state plan. The House amendments did not please the Senate and the bill stalled.
One of the sticking points is the nature of the hybrid defined benefit-defined contribution plan model on the table. The House has pushed for a “stacked” plan, where the defined benefit portion would cover the first $50,000 earned, with a defined contribution plan for the remaining compensation and for all income earned after 25 years of service. The Senate would prefer a “side-by-side” plan, with the DB and DC elements operating in tandem on all compensation.
The chambers will now confer on a compromise bill over the next few months. Language preserving local 403(b) choice has consistently remained intact in all of the various iterations of pension reform legislation throughout the last year and a half without significant controversy within either chamber.
Ray Harmon, Esq., is government affairs counsel for NTSA.
We reported in June that the House had passed its own amended version of SB 1071, a pension bill intended to turn around the state’s unfunded pension liability problems by shifting cost burdens from the state to participants through the adoption of a hybrid state plan. The House amendments did not please the Senate and the bill stalled.
One of the sticking points is the nature of the hybrid defined benefit-defined contribution plan model on the table. The House has pushed for a “stacked” plan, where the defined benefit portion would cover the first $50,000 earned, with a defined contribution plan for the remaining compensation and for all income earned after 25 years of service. The Senate would prefer a “side-by-side” plan, with the DB and DC elements operating in tandem on all compensation.
The chambers will now confer on a compromise bill over the next few months. Language preserving local 403(b) choice has consistently remained intact in all of the various iterations of pension reform legislation throughout the last year and a half without significant controversy within either chamber.
Ray Harmon, Esq., is government affairs counsel for NTSA.
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