Pennsylvania Republicans are pushing a new retirement contribution plan for future state and public school workers in hopes of easing the state’s mounting pension woes.
State Senate Majority Leader Dominic Pileggi said Wednesday the proposed switch to an employee 401(k) system would only take care of part of the state’s pension problems, according to the
Pittsburgh Post-Gazette. But the Republican leader said it was an important part of resolving the state’s financial burdens.
The plan calls for state and public school employees hired Dec. 1 or later to enroll in a retirement contribution plan that resembles a traditional 401(k) and not the defined benefit pension current workers have now.
Mike Turzai, the Republican state House majority leader, suggested that lawmakers have little choice in the matter.
“Ultimately, we have to move to a defined contribution plan from a defined pension plan, because that’s what everybody who’s paying the taxes is doing,” he said.
Pileggi said legislators also have to address the pension costs amassed by current workers. Last year, for example, state employees earned about $37 billion more in pension benefits than the state had available to pay out, according to the Post-Gazette.
© 2013 Newsmax. All rights reserved.