Harrisburg – May 13, 2015 – Senate Democratic Leader Jay Costa (D-Allegheny) said that the Senate Republican pension reform plan that passed the Senate today (Senate Bill 1) is illegal because it impacts benefits of current employees, is woefully short-sighted, and unfair to workers.
Costa challenged Senate Republicans in floor debate to reconcile well-established law with the proposal. He said that the plan would be immediately challenged in court, cause a litigation explosion and compel taxpayers to cover back benefits.
The Democratic leader said that the Republicans abused the process in rushing the measure to the Senate floor for a vote. Plus, he said that both Senate Democrats and Gov. Tom Wolf have offered responsible, constructive, constitutional proposals that would address high public pension costs reasonably.
Costa said the plan provided little relief even if the bill overcomes legal hurdles. The projected savings for the teachers’ retirement system would be $3.1 billion and $600 million for the state employees system.
He said the measure does not address the unfunded liability in the pension funds that spiked because Pennsylvania failed to make its actuarially required contribution for 17 years. Eighty-eight percent of current costs of the state worker and teacher retirement funds are to pay off the unfunded liability. The plan adds a cash-balance plan for new hires but uses contributions from new hires into the fund to pay retirement benefits for others.
Costa’s comments follow:
“Senate Democrats believe that there are responsible pension reform plans that protect taxpayers and provide reasonable benefits for workers but the Senate Republican plan does neither, plus it is unconstitutional. The Republican plan hurts current workers, devastates pension benefits for future employees and provides little in the way for relief for taxpayers.
“The plan puts new employees and future retirees into poverty and makes changes in public pension systems that are unreasonable. The process that was used to pass this plan was flawed and rushed and the plan itself falls woefully short of any reasonable tests of legality or fairness.”
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Contact: Stacey Witalec
Telephone: 717 877-2997
Email: switalec@pasenate.com