Pennsylvania Senate Advances Bill Calling for Steep Municipal Pension Reforms


In Pennsylvania, lawmakers have been pushing for months to include state-level pension reforms in an upcoming budget deal.

But lawmakers are now also attempting to overhaul the state’s municipal pension system – and that initiative took a step forward this week as a municipal pension reform bill cleared the Senate Finance Committee.

More on the bill and what it would mean, from Keystone Crossroads:

Lawmakers have advanced a proposal meant to address Pennslvania’s multibillion-dollar municipal pension problem — but some critics say it would severely compromise retirement security and fail to adequately address how funds are managed.

Under the amendments, municipal workers already hired, vested or retired wouldn’t experience changes to their promised pensions. But all municipal pension plans also would be subject to stricter disclosure rules and parameters for actuarial assumptions. And they’d be prohibited from counting overtime more than 10 percent of a worker’s base salary as part of the compensation on which pension awards are based.

The amendments also call for overhauling the structure of some municipal pension funds, depending on funding levels — an estimate, essentially of how much money the fund’s expected to have relative to what it’s obligated to pay pensioners over their lifetimes.


The amendments discussed Wednesday would include Philadelphia, which was excluded from the prior bills on which they’re based. Because Philly’s police and fire pension funds are severely distressed, PMRS would manage them going forward if the amendments become law.

The state’s municipalities are collectively shouldering $7.7 billion in unfunded pension liabilities. But many lawmakers remain staunchly opposed to eroding retirement security to the extent that the latest bill would allow.


Photo credit: “Flag-map of Pennsylvania” by Niagara – Own work from File:Flag of Pennsylvania.svg and File:USA Pennsylvania location map.svgThis vector image was created with Inkscape. Licensed under CC BY-SA 3.0 via Wikimedia Commons

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