Pennsylvania Senate rejects pension reform bill

The Pennsylvania Senate on June 23 rejected a state House bill that would have created a hybrid retirement plan for new employees participating in the state employees and teachers defined benefit plans.

The Senate voted 31-19 in favor of a “motion to non-concur,” or to reject, the reform bill that was approved by the state House on June 13.

House Bill 1499 would have established a mandatory 401(k)-type defined contribution plan for future employees. The first $50,000 of the employee's salary would be covered by the traditional defined benefit plan. Any amount of salary above the cap would be covered through the DC component.

The bill would have covered new employees in the $48.5 billion Public School Employees' Retirement System and the $26 billion State Employees' Retirement System, both in Harrisburg. The two plans have more than $56 billion in unfunded liabilities.

Pennsylvania Gov. Tom Wolf had endorsed the bill.

Rick Baert writes for Pensions & Investments, a sister publication of Business Insurance.