HARRISBURG, PA — The scope of a House bill to curb municipal pension benefits for future police and firefighters is being narrowed to cover only those pension systems in serious financial trouble, such as those in Scranton, Dunmore and Hazleton.
The measure sponsored by Rep. Seth Grove, R-York, has been amended by a House committee to apply to about 150 municipal police and firefighter pension systems with a funding ratio of less than 70 percent.
The bill initially applied to police and firefighter systems statewide.
The bill’s new focus is to bring financial stability to failed pension plans.
“We will not accept any failed pension plans from here on out,” Grove said Monday.
The measure would put future police and fire employees hired after the act’s effective date into a cash balance pension plan combining elements of the traditional defined benefit plan and the defined contribution plan similar to 401(k) investments.
Under the bill, current paid police and fire employees would keep existing benefits, but they would be frozen at current levels.
A number of municipal pension systems in Northeastern Pennsylvania fall in the distressed category. This amendment would make the changes applicable to the Scranton City firefighter and police pension plans, the Dunmore Borough firefighter and police plans and the Hazleton City firefighter and police plans if enacted, for example.
Scranton firefighter and police pension plans have funded ratios 29 percent and 43 percent respectively, Dunmore firefighter and police pension plans both have funded ratios of 66 percent and 48 percent respectively and Hazleton firefighter and police pension plans have funded ratios of 42 percent and 47 percent respectively, according to 2011 data from the Public Employee Retirement System.
Scranton, Hazleton and Dunmore are among the 25 municipalities with the largest pension deficits, according to a recent report by state Auditor General Eugene DePasquale.
The bill which remains in the Local Government Committee probably won’t see any more action until the fall.
The goal over the summer will be to find a broader compromise, said Rep. Sid Kavulich, D-Taylor, a panel member.
“We’ve got to do what we can to help the municipalities, but you don’t want to hurt the firefighters or police in these municipalities,” he said.
http://citizensvoice.com/news/municipal-pension-focus-narrows-1.1703995