Pension Reform Bill Heads to Pa. House Floor

Legislation sponsored by Rep. Warren Kampf (R-157) to reform Pennsylvania’s two public pension systems has passed the House State Government Committee and is headed to the whole House for a vote, according to a statement from Kampf’s office.

“Our public pension liability is expanding at an alarming rate and threatens the quality of our education system and the economic well-being of taxpayers,” Kampf said. “We cannot continue adding workers to it without severe consequences.”

House Bill 727 would place future state workers and school district employees into an employee-directed defined contribution plan, similar to a 401(k) system, rather than the current and wholly taxpayer-funded defined benefit plan.

Pennsylvania funds two large pension systems, the State Employees’ Retirement System (SERS) and the larger Public School Employees’ Retirement System (PSERS). Kampf says that both are underfunded by more than $53 billion and are requiring larger shares of state and local school districts’ budget dollars to keep up with the funding requirements imposed by the state.

“Through a combination of the 2008 economic collapse, years of underfunding and prior administrations’ unwillingness to make the tough choices, our pension system is now at a point that threatens every Pennsylvania taxpayer at the state and local level,” Kampf said.

Kampf’s legislation would change the retirement system for new hires to a defined contribution system that more closely matches the retirement plans in which private employees enroll.

The 157th District is located in Chester and Montgomery counties and includes parts of Phoenixville, Berwyn and Paoli.