Pa. House panel OKs pension plan switch in 2015

HARRISBURG, Pa. (AP) — A House committee today endorsed legislation to shift Pennsylvania’s major public pension systems to 401(k)-style plans for newly hired employees starting in 2015, a concept previously endorsed by a Senate panel, but the financial implications remained unclear.

An all-Republican majority on the State Government Committee voted to push the legislation to the House floor over the objections of Democrats who said it was unfair to state workers and school employees.

Republicans said the new system would put Pennsylvania’s public pensions on equal footing with the majority of private-sector employees and provide more certainty about the state’s pension costs.

It would place public employees “on a trajectory where politicians can’t screw it up any more,” said Rep. Matt Gabler, R-Clearfield. “They will be in control of their own accounts.”

Rep. Mark Cohen of Philadelphia, the panel’s ranking Democrat, said the legislation would reduce pensions for future employees and create pension disparities among employees doing similar jobs. He called it “a terrible step in the wrong direction.”