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Tobash Pleased with Historic House Passage of Meaningful Public Pension Reform
HARRISBURG – In continuing his efforts to address Pennsylvania’s massive public pension debt, which totals more than $56 billion, Rep. Mike Tobash (R-Schuylkill/Dauphin) joined the majority of his House colleagues in favorably voting for a pension reform plan, which he has sponsored. Tobash’s plan takes an important step in implementing public pension reform. Current employees are not affected, and billions in savings are expected as the state moves its pension systems into the 21st century.

“The plan we voted on today will stop the bleeding from within the current systems by reducing the annual taxpayer contributions over time,” Tobash said. “This reform measure represents fiscal responsibility and not just a ‘quick fix,’ as it requires a fundamental change that helps the state meet its obligations in the future.”

The House-approved reform measure establishes a mandatory defined contribution, 401(k)-type plan for future employees, similar to the ones available to people in the private sector. The first $50,000 of the employee’s salary would be in the traditional pension, or defined benefit plan, providing a predictable pension benefit for future retirees. Any amount of salary above the cap would be covered through the 401(k)-type, or defined contribution plan, which allows participants to have more control over their investments and to tailor their investments to their own needs.

“I’m not asking anyone to celebrate a victory today; no one ever wants to show up with the news that we have to cut back, even in this case where it’s only affecting future employees,” Tobash said. “However, this is the job that my colleagues and I were sent here to do, and sometimes tough choices are part of this job. Today, we decided to address one of our state’s largest issues, and make a fiscally responsible change that will benefit every Pennsylvanian. If we look around and take advantage of our opportunities, manage our challenges and stay positive, we can ensure a better tomorrow for our students, workers and taxpayers.”

Tobash said his plan shifts the risk currently facing the state, school districts and taxpayers to the members of the retirement plans, as hybrid tier participation grows. Further, the plan proactively works to protect the benefits that hard-working Pennsylvanians have already earned.

For many school districts, escalating pension costs have forced them to apply for exceptions to increase property taxes above the school districts’ established index. For budget year 2014-15, the leading reason indicated for 99.4 percent of the exemptions approved was pension obligations.

“Our current pension debt has really been crushing our schools,” Tobash said. “That’s another reason pension reform is so crucial. Every cent being spent on the astronomically high costs of pensions is a cent not being directly spent on our students. Our schools are under a tremendous amount of stress, and if it would continue to be unaddressed, property taxes would continue to be raised.”

Pennsylvania has two public pension systems, the State Employees’ Retirement System (SERS) and the Public School Employees’ Retirement System (PSERS). The state’s more than $56 billion funding shortfall exists between these two systems. Both SERS and PSERS currently provide employees with a defined benefit retirement plan, meaning the pension benefit to be provided at retirement is defined, while contributions are variable based on the experience of the pension fund.

Tobash’s stacked hybrid plan was amended into Senate Bill 1071. The bill, as amended, has been sent back to the Senate for its approval.

For more information about this legislation, or any other state-related issue, contact Tobash’s district office in Schuylkill Haven located at 988 East Main St., by calling 570-385-8235. Information can also be found online at or

Representative Mike Tobash
125th District
Pennsylvania House of Representatives

Media Contact: Krisinda Corbin /
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