Pension proposal is questionable
Once again, the Republican-controlled state Senate is asking state employees and teachers to contribute more to their pension plans, even though Act 120, which became law in 2010, raised their contributions significantly.
In addition, under Act 120, employees are no longer given retirement credits for overtime hours worked; they no longer, at their time of retirement, are able to withdraw their contributions; and the number of years for vesting has been increased.
It should be noted that state employees and teachers were never given a “holiday” from their required payments, as the state and school districts once enjoyed.
Given that Act 120 was put in place just five years ago, and was expected to help solidify the state retirement systems over 25 or more years, shouldn’t the plan be given the opportunity to work?
Under the Republican proposal, newly-hired employees will no longer be enrolled in the defined benefit plan and would be placed in a 401(k)-type plan. If the plan for current employees remains in effect, it would appear that, because the new employees would no longer be making contributions to the defined benefit plan, it’s conceivable current employees would have to make to make additional contributions to make up for those lost dollars because new hires would no longer be contributing to the plan.
Isn’t it also conceivable current retirees could see a reduction in their pensions, since the plan would no longer be receiving contributions?
Even though state Senate Majority Leader Jake Corman has proposed these changes, perhaps he would do well to propose legislation that would do away with the automatic 3 percent cost of living increase that members of the legislative, judicial, and executive branches receive every year.
Barry L. Andrews
Washington
Andrews is president of the Washington-Greene Central Labor Council.