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New Senate GOP effort to overhaul pension benefits

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HARRISBURG – The Pennsylvania state Senate unveiled legislation Sunday in the latest Republican effort to overhaul retirement benefits in Pennsylvania’s two big debt-saddled public pension systems.

A first committee vote, scheduled for Sunday night, was to come hours after a draft of the legislation became public. Senate officials hope months of closed-door negotiations will result in speedy approval by GOP-controlled House and Senate later this week, and a signature by Democratic Gov. Tom Wolf.

Senate Republicans have tried unsuccessfully for four years to end or reduce the traditional pension benefit for future state government and public school employees in favor of a 401(k)-style benefit. The bill would create a hybrid plan, and give future hires a choice of either that or a plan made up entirely of a 401(k)-style benefit.

The bill would produce no short-term savings for the state or school districts, both which are straining under a sharp increase in pension obligation payments in recent years, in part to make up for years of delinquent payments.

If anything, pension obligations under the bill would rise slightly in the first 15 years, actuaries say. The bill would reduce retirement benefits for future pensioners in the system, while the amount future employees pay into the system would increase under most scenarios, according to a report by the Independent Fiscal Office, a nonpartisan legislative agency that reviewed actuarial analyses of the legislation.

Long-term savings were projected to be minor. Should it pass, it would become the second pension overhaul in eight years.

Future state troopers and corrections officers are exempt from the bill’s plan overhaul, ensuring that about one-third of eligible state government employees keep the traditional pension benefit. Current public employees are exempt, as well, and Senate Republicans backed off an earlier effort to force sitting state lawmakers into the new plan upon re-election after that provision hit opposition last year in a previous version in the House. Lawmakers and current state employees may still join a hybrid plan or switch entirely to the 401(k)-style benefit plan.

Wolf’s office did not respond to queries Sunday about his position on the newly unveiled bill.

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