Frankel: Pension Reform Bill..A Good 1st Step

Pennsylvania House members return to the Capitol Monday to vote on pension reform legislation. House Democratic leaders reversed course and re-scheduled the vote after rank and file lawmakers ripped the leadership for canceling the last 5 voting days in this legislative session.
State Representatives will be voting on a Senate-amended House bill that would overhaul
future state and public school employees’ pension plans in Pennsylvania. The amended measure scales back benefits and increases the retirement age for incoming workers.

Representative Dan Frankel of Pittsburgh says it's an important piece of legislation but he understands there are people who don't think it's adequate for what needs to be done....
"It rolls back the pension enhancements that were passed in 2001 and it creates an ability to smooth out the increased pension payments that are going to have to be made by the state and the school districts so they won't have the full impact that will devastate the budgets of the state and school districts.

Senate Finance Committee Chairman Pat Browne, who amended the House bill, says a big problem with Pennsylvania’s current defined benefit plan is the fact the state bears the brunt of the cost, when the markets fail like they did in 2008.
He concedes unions and many Democrats don’t want to switch to a defined contribution system, where employees pay the price for underperformance. Under Browne's amendment, if the system doesn’t make its investment goals, part of that loss would be borne by the employee.

Many Republicans had called for a full switch to a defined contribution system. Democratic Representative Frankel says the state can't wait...."The sooner we get this (2001) legislation replaced with the more reasonable pension benefit that new employees will be receiving (the better). If you wait, you're going to add on to the problem we created."

Frankel expects the bill to be approved.
The measure also extends the vesting period for a new employee from the current 5 years to 10 years.