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6/15/17

by News Department on 06/15/17

Pension cuts...




Pennsylvania is moving to cut costs again in its big public pension plans. 

Democratic Gov. Tom Wolf signed legislation this week that is projected to provide a less expensive pension benefits structure for future school and state government employees. 

The legislation will 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. However, Mitchell says the legislation doesn't fix the funding gap in the current pension plans.


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