Municipal pension reform getting attention at state Capitol

A panel formed by Gov. Tom Wolf to examine the state’s debt-burdened municipal pension plans will be delivering its report to the governor on Tuesday.

Auditor General Eugene DePasquale, who chairs that task force, said the report’s recommendations will deal with both uniformed and non-uniformed municipal employee pension plans, which combined have accrued an $8 billion unfunded pension liability.

“There will be specific proposals we will be having in that plan,” DePasquale said.

Despite the forthcoming release of that report, the Senate Finance Committee on Wednesday approved by an 8-3 vote legislation that seeks to bring municipal pension plans in distress back to sound financial footing.

It would allow municipal officials to implement a 401(k)-style plan for newly hired uniformed municipal police and firefighters. The plan would be optional for municipalities to implement.

Earlier in the month, the House State Government Committee approved a separate municipal pension reform bill that would mandate municipalities that meet certain criteria to establish a cash-balance, hybrid pension plan, which combines features of the current defined benefit plan with a 401(k) style plan, for newly hired uniformed employees.

Both of those bills would remove pensions from being the subject of arbitration.

While at least one senator considered it premature for the committee to advance legislation prior to receiving the task force’s report, DePasquale said he has no problem with the General Assembly positioning legislation for future action.

House and Senate Republican leaders told Capitol reporters on Monday that municipal pension reform legislation could be considered by their chambers before the summer break, depending on how protracted the budget negotiations are.

“The sooner you can do it the better,” DePasquale said. “Honestly, I want to make sure it gets done right but the sooner we do it the better. Everyday that goes by the problem gets more expensive.”

He said slightly less than half of the state’s 3,000-plus municipal pension plans are in some level of distress.