Benninghoff Votes to Protect Taxpayers by Reforming State Pension Plans
6/17/2010

Rep. Kerry Benninghoff (R-Centre/Mifflin) on Wednesday voted for a bill approved by the House that will reduce short-term and long-term costs associated with the state’s two public pension systems for teachers and state employees.  The reduced costs could help local school boards avoid some property tax increases in the future. 

“This bill is about protecting property taxpayers,” Benninghoff said.  “Without these important reforms, taxpayers across Pennsylvania could be looking at billions of dollars in increased costs.  Sitting by and doing nothing is not an option.” 

The bill would apply a series of reforms for teachers and state workers hired next year or any time thereafter.  The Pennsylvania Constitution and the U.S. Constitution prohibit making changes to benefits for employees already enrolled in a state pension plan. 

The reforms would be applied to the state’s two public pension systems – the State Employees’ Retirement System (SERS) and the Public School Employees’ Retirement System (PSERS). 

One of the biggest reforms would be to reduce the multiplier used to calculate pension benefits.  Currently, benefits are calculated using a formula mixing the employee’s salary, years of service and a multiplier of 2.5 percent.  Under the pension reform bill, that multiplier would be reduced to 2 percent. 

Another reform would increase the minimum retirement age for PSERS members to 65 with three years of service instead of the current minimum of 62 with one year of service. 

The reform bill also would double the amount of time from five years to 10 years that an employee must work before becoming “vested” – or guaranteed benefits – in the pension plans.  Finally, it eliminates the option for retirees to take a lump-sum payment upon retirement. 

“This is bipartisan legislation to address the pension issue through meaningful reforms,” Benninghoff said.  “Ignoring the problem of rising pension costs will not make it go away.  This bill is a compromise solution that honors the commitment made to state employees and teachers while protecting taxpayers.” 

The bill now heads to the Senate for consideration.  If the Senate approves the bill without amending it, the legislation would head to the governor’s desk for his signature. 

Rep. Kerry Benninghoff
171st District
Pennsylvania House of Representatives

(814) 355-1300
(717) 783-1918
KerryBenninghoff.com
Contact:  Dan Massing
House Public Relations
(717) 772-9845
www.pahousegop.com

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