Pennsylvania takes new step on troubled public pension plans

HARRISBURG, Pa. (AP) – Pennsylvania is moving to cut costs again in its big public pension plans, among the nation’s most troubled.

Democratic Gov. Tom Wolf signed legislation Monday that’s projected to provide a less expensive pension benefits structure for future school and state government employees beginning in 2019. It’ll also shift some risk of investment losses off taxpayers and onto the public employees of tomorrow by introducing a 401(k)-style benefit.

It’s Pennsylvania’s second pension benefits reduction for future employees in eight years. About one-third of U.S. states already administer a mandatory or optional 401(k)-style retirement benefit for employees.

Olivia Mitchell at the University of Pennsylvania’s Pension Research Council says the bill eventually will provide some relief from pension costs. But, Mitchell says the legislation doesn’t fix the funding gap in the current pension plans.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s