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Pension Reform Plan Helps to Protect Current Employee and Retiree Benefits, While Saving Taxpayer Dollars Says Tobash
4/24/2014
HARRISBURG – Rep. Mike Tobash’s (R-Schuylkill/Berks) pension reform proposal would reduce the costs of both the state (SERS) and teacher (PSERS) pensions for taxpayers, but NOT at the expense of retirees or those who remain enrolled in the current systems, he said today.

“As a result of underfunding, huge declines in the market and previous benefit increases, Pennsylvania is facing a nearly $50 billion debt that will take decades to overcome,” said Tobash. “The enormity of the challenge is matched only by our commitment to protect people already in the pension systems and pay them the benefits they have earned.

“We are committed to protecting the benefits of current retirees and workers,” said Tobash. “Anyone telling people anything different does not fully understand this plan.”

Tobash’s plan is anticipated to save the Commonwealth’s General Fund $7.4 billion, and all employers, including school districts, $15.1 billion over the 30-year projection period. This plan would be established for NEW employees entering the pension systems, and would not change benefits for existing participants or retirees.

The proposal is designed to address three critical areas, including shifting the risk of future pension obligations away from taxpayers, reducing the underfunding that exists in our current system, and establishing fiscal responsibility with taxpayer dollars. All state and public school employees would be subject to the same plan. Those not receiving Social Security benefits will receive an additional defined contribution plan component.

Additionally, if an employee takes a leave of absence, he or she would continue in the current pension system. Provisions for a leave of absence would include furloughs, intervening military service, disability, inactive employment status for up to a two-year period, maternity leave, and the Family Medical Leave Act.

“We must bring down the debt in both of the Commonwealth’s major pension systems, thereby protecting an employee’s investment,” said Tobash. “My legislation provides equal treatment to everyone – teachers, judges, lawmakers, all state and school employees – so no one is favored or excluded. We have gone to great lengths to ensure our teachers, state police and public employees will receive fair and equal treatment under this plan.”

In the current fiscal year (2013-14), the state’s total employer contribution is approximately $3.4 billion. Under current law that figure will move to above $6.6 billion by fiscal year 2018-19. A more than $3 billion increase is equivalent to approximately 60,000 jobs. Our willingness to address this issue will directly affect our ability to maintain these jobs, Tobash added.

“Most of us are familiar with public pension systems in other parts of the United States that have faced crisis status,” said Tobash. “In Detroit, existing employees are facing deep cuts. In Pennsylvania, our approach is to be proactive so our public employees and teachers get every dollar they have earned.”

An overview of Tobash’s entire plan, including details on the defined benefit and defined contribution plans, can be found online at www.RepTobash.com

Representative Mike Tobash
125th District
Pennsylvania House of Representatives

Media Contact: Krisinda Corbin
717.705.2032
kcorbin@pahousegop.com  
RepTobash.com / Facebook.com/RepTobash
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