A Senate panel voted Sunday night to change pension benefits for all new school employees and most state workers after 2018.

The state Senate voted today on a bill to drastically change retirement benefits for most state employees and all school employees hired after 2018.  The 40-9 vote came a day after the Senate convened for a rare Sunday night session to begin moving the bill, which seeks to reduce the long-term risk associated with taxpayers bailing out the state’s two debt-ridden pension plans in bad economic times.  The Republican-controlled Senate’s vote moves the bill to the GOP-controlled House, where it is expected to also be approved and sent to Democratic Gov. Tom Wolf’s desk for his signature.  The bill would move affected workers from a fully backed taxpayer-funded pension plan in which retirements benefits are guaranteed regardless of Wall Street performance to a so-called hybrid plan. That hybrid would keep about half of workers’ pensions in the taxpayer-backed guaranteed plan. The other half would go into a corporate-style 401(k) plan that goes up and down with the market, reducing taxpayer exposure by more than 50 percent.  New workers could also elect to have all retirement benefits placed into a 401(k) instead of one of two hybrids.  “This is the largest risk transfer in a public pension system of our size in the nation’s history,” Sen. Pat Browne, R-Lehigh, chairman of the Senate Appropriations Committee, said Sunday night.  The hybrids would also reduce retirement benefits by 18 percent for new school employees and by 16 percent for most new state workers compared to current employees hired after 2010.

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Source: Steve Esack Contact Reporter Morning Call Harrisburg Bureau June 4, 2017.