HARRISBURG, June 16 – The Pennsylvania House of Representatives today passed a comprehensive pension reform bill that tempers the dramatic spike in pension costs faced by the state and school districts and creates new rules for future employees in an effort to stabilize the finances of public pension funds in future decades.
House Bill 2497 passed the House by a vote of 192 to 6 and now moves to the Senate for consideration.
“A lot of hard work went into this proposal and, in the end, the key players, including the unions who represent state employees and public school employees, all agreed that it’s a solid plan for addressing the pension crisis. What’s most important is that it provides predictability in terms of the costs to the state and the school districts,” said Rep. Dwight Evans, D-Philadelphia, chairman of the House Appropriations Committee and the bill’s prime sponsor. “I hope the Senate looks at this bill on its merits and moves quickly to pass it so the governor can sign it into law.”
The measure includes two key elements: mitigating the skyrocketing employer contribution costs faced by the state and school districts by changing the systems’ funding methodologies, and reducing benefits for future state and public school employees.
“By passing this plan, the House has shown that it is serious about finding a responsible solution to the pension crisis facing local school districts and the commonwealth,” said House Majority Leader Todd A. Eachus, D-Luzerne. “This bill helps to bring critical relief to Pennsylvania taxpayers, while at the same time keeps our commitment to protect retirement benefits for our teachers and public servants. It’s a commonsense approach to a problem that we couldn’t just wish away.”
“When it came to the looming pension crisis, the one thing the House couldn’t do was sit back and wait for the economy to get better to solve the problem – or just leave the burden fall on the taxpayers,” said Speaker of the House Keith McCall, D-Carbon. “House Bill 2497 responsibly addresses the problem from both sides – easing the short-term spike by spreading any increases out over a longer time, while making commonsense reductions to future benefits.”
“The House addressed a serious budget concern in a way that will reduce financial obligations for the state and its 500 school districts over the next decade,” said Majority Whip Frank Dermody, D-Allegheny. “If the Senate agrees with the approach designed by Chairman Evans, we can take a major step toward balancing this year’s budget.”