We applaud the Senate Finance Committee for moving meaningful pension reform legislation. The Committee advanced SB 922 to put all new state and school district employees into a defined contribution plan, similar to a 401(k).
This is a critical first step to addressing our public pension crisis. Our current pension system is like a sinking ship, and we need to stop adding more passengers. Placing new employees in a defined contribution does just that, plugging the hole in the hill first, so that we can start bailing out the water.
Defined contribution plans provide a sound retirement for workers while also being affordable and predictable for taxpayers. Moreover, this reform will get politics out of pensions and prevent manipulation of pension benefits and payments that created the $47 billion and growing crisis.
Despite the many myths surrounding the pension crisis, there is a way forward. To find out how we can stop the pension crisis from dragging down Pennsylvania’s economy, please visit CF’s Principles for Public Pension Reform.