A conservative think tank is urging the Pennsylvania House to vote against legislation that aims at overhauling future state and public employees' pension plans in Pennsylvania.
Matthew Brouillette, president of the Commonwealth Foundation, claims the measure will thwart real reform....
"Governor-elect Tom Corbett has committed to pushing a defined contribution pension system, the same that you find in the private sector. Organized labor knows that they're going to have to enter into the fiscal realities that the rest of Pennsylvanians and Americans have been dealing with for years."
Current union state and school district employees have defined benefit pensions that are based on a multiplier of their salaries. Under defined contribution, the pension is affected by the investment markets.
Brouillette claims the measure that will be voted upon Monday will not save money. But it does reduce the multiplier factor for new employees and extends the vesting period from 5 years to 10 years of service.
Senate Republicans did amend this bill so that in a market downturn, if the pension system does not meet its investment goals, part of the loss would be borne by the employees.