Apr 9, 2015 2 min read

State Rep. Peter J. Daley, D-California, reintroduced two bills to provide early retirement incentives for public school teachers and state employees at no net cost to state pension funds or Pennsylvania’s general fund.

“Let’s take a lesson from private industry and utilize early retirements,” said Daley, Democratic chair of the House Consumer Affairs Committee. “We can save money and create thousands of jobs by offering early retirements that would be funded with the net savings generated.”

Daley said his H.B. 861 could create as many as 10,000 jobs for young teachers, while his H.B. 862 could create up to 4,000 new entry-level state jobs.

“We can give our economy a needed boost without furloughs or cutting programs,” Daley said. “We also can help address the $50 billion unfunded liability in the state’s pension plans.”

Under the measures, state employees and teachers with 30 years’ service, or age plus years of service equaling 80, would be eligible for full retirement benefits through the State Employees Retirement System or the Public School Employees Retirement System, before reaching their normal retirement age.

“Replacing a teacher at the top of the pay scale with an entry-level teacher saves $20,000 to $30,000 a year – savings that continue for a number of years,” Daley said. “Likewise, longtime and older state employees are typically earning higher wages.”

Daley said his measures would accelerate pension savings being accrued under Act 120 of 2010 – which provides a 25-percent reduction in new pension benefits via SERS and PSERS, and reduces employer cost of pensions for new employees by 20 percent.

House Bill 861 was referred to the House Education Committee for consideration. H.B. 862 is before the House State Government Committee.