- new state employees would be enrolled in a plan that is a combination of a 401(k)-style plan and traditional pension plan;
- all state and public school employees would be enrolled in the same plan;
- the only state employees who would not be enrolled in the new plan would be those who do not receive Social Security benefits; they would receive an additional defined contribution plan benefit instead;
- all new employees would be subject to shared risk provisions;
- employees who take leaves of absence would continue to be covered by the current pension system; and
- the bill would not change the benefits of current state employees.
The Public School Employees Association, Pennsylvania’s largest teachers’ union, opposes the plan. They argue that it will save little money and hurt pension balances. The Keystone Research Center contends that the proposal would result in lower investment returns for future employees.
John Iekel is Senior Writer and Editor for the NTSA Net portal.
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