Landmark pension reform legislation was unveiled today, as the Commonwealth Foundation stood with Gov. Tom Corbett, state lawmakers, business leaders, school board members and other groups.
The new bills, introduced by Sen. Mike Brubaker (co-sponsor memo) and Rep. Chris Ross (co-sponsor memo) would create a defined-contribution plan for new state and school employees, and reduce future pension benefits for new employees. A summary of this proposal is included in our 2013 State Budget Overview.
As special interest groups have created a slew of myths to fight off pension reform, we have two new fact sheets addressing the most common myths. The first examines the truth behind the pension crisis—how we got here, and why we must act now. The second looks at the benefits of moving to a “Defined Contribution” plan, like a 401(k).
Here’s the key facts on pension reform:
- The politics inherent to traditional plans are a major factor in causing the current pension crisis.
- Defined contribution plans (which are now the standard in the private sector) can and do provide adequate retirement benefits.
- Shifting to a defined contribution plan will help remove politics from pension funding, and contrary to claims about “transition costs”can actually save taxpayers.
Stay tuned as we debunk each pension reform myth in greater detail here over the next few weeks.