Scavello Votes for Pension Reform to Ease Crushing Burden on Schools

Harrisburg — Senator Mario Scavello (R-40) supported Senate passage of legislation Wednesday to reform Pennsylvania’s public pension systems, which are draining money from classrooms and driving up property taxes.

Senate Bill 1, which Scavello co-sponsored, would reduce long-term costs to taxpayers by creating a 401k-style pension system for newly hired employees who are eligible to participate in one of the state’s two public employee pension systems – the State Employees’ Retirement System and the Public School Employees’ Retirement System.

“Pension costs are skyrocketing and it’s a crisis that requires action now. We can’t go another year kicking the can down the road. It’s killing our schools and forcing up school property taxes, and is the driving force behind the Governor’s call for unprecedented state tax increases,” said Scavello.

Senator Scavello noted the East Stroudsburg School District has faced the following increases in actual and projected pension costs since 2008-2009:

  • 2008-2009             $2.7 million
  • 2013-2014             $10.1 million
  • 2014-2015             $13.1 million
  • 2015-2016             $16.2 million
  • 2016-2017             $19.1 million
  • 2017-2018             $20.1 million

[*Pension costs for all school districts in the 40th Senatorial District are listed below. Source: PDE]

The bill would not affect benefits already earned by current employees or retirees. However, current employees would be given the option to either increase their contribution rate or accept a reduced benefit going forward. Retirees would not be affected by Senate Bill 1.

Watch: On the Senate floor, Senator Scavello discusses the need for pension reform.

“In past years while this problem was growing, solutions were introduced in the General Assembly but were voted down, turning a serious problem into an all-out crisis. Let’s not make that mistake again. The time to act is now,” he said.

A non-partisan analysis by the Public Employee Retirement Commission determined the measure would save $18.3 billion over the next 30 years.

The bill would require lawmakers to participate in the same pension system as newly hired employees. It also creates a new commission to study investment options and fees associated with managing pension system assets.

Senate Bill 1 was sent to the House of Representatives for consideration.

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CONTACT: Taylor Munoz
(717) 787-6123