HARRISBURG, Pa. – Gov. Tom Wolf's administration fired a new volley Monday against a Senate Republican bill to overhaul benefits in Pennsylvania's two big public employee pension systems, saying that they voted to line their own pockets.
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A Senate Republican spokeswoman countered that the administration is using a selective, salary-based argument. Although lawmakers have a history of giving themselves a cushier pension benefit, the Senate GOP says the bill gives lawmakers no special treatment and actually reduces their benefits.
In any case, Wolf, a Democrat, has said that the Senate GOP bill lacks fairness for workers as both sides advance their own plans to blunt the effect of rising pension obligation payments.
In a speech Monday at a Pennsylvania Press Club luncheon, Wolf's chief of staff, Katie McGinty, lambasted the Senate GOP bill as unfair to taxpayers and other public employees.
"It is a huge and, I'm sure to taxpayers, unacceptable, lavish payout to legislators," McGinty said. "The legislators who voted for this voted to line their own retirement pocket with a payout that is 2.5 times the pension benefit that will be earned by the average Joe, the average employee."
The bill, she added, allowed lawmakers to avoid a key, money-saving concession that many of the 370,000 current state government and public school employees will be asked to make.
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Overall, the bill would end the traditional pension benefit for future employees and replace it with a 401(k)-style plan and a cash balance plan. Today's retirees would be unaffected, while Democrats say the bill's key money-saving provision — requiring many current employees to pay a higher portion of their paychecks to keep their current benefit level — is unconstitutional.
A Senate GOP spokeswoman, Jennifer Kocher, said the bill would immediately shave down the traditional pension benefit for lawmakers to the lower benefit accrual rate of 2 percent — or 2.5 percent with a higher employee contribution — allowed under a 2010 law. Once a lawmaker is elected or re-elected, they would enter a new benefit scheme, earning a 4 percent employer contribution into a 401(k)-style plan, like other newly hired state government employees. Newly hired public school employees would enter a 401(k)-style plan with a 2.6 percent employer contribution.
Lawmakers earn a base salary of about $85,300 in 2015, well above the average salary of a state government or public school employee.
The Senate Republicans' bill passed last Wednesday, without a hearing five days after it was introduced. Every Democratic senator opposed it, along with one Republican. It is scheduled for a June 4 hearing in front of the House State Government Committee.