Two Pennsylvania lawmakers have introduced legislation to reform the state’s municipal pension systems.
House Bill 316 would place new hires in a defined benefit plan with a balance made up of mandatory employer and employee contributions and an employer-guaranteed interest credit.
Current employees would maintain all existing rights and benefits, but the benefits would be frozen at current levels.
Reps. Keith Greiner (R-Lancaster) and Seth Grove (R-York) said their proposal would apply to all townships and boroughs with full-time public safety personnel and all cities except Philadelphia.
Auditor General Eugene DePasquale said in January that 562 municipalities out of 1,223 that administer pension plans are distressed and underfunded.
DePasquale’s report said local governments with the weakest pension plans were underfunding them by $7.7 billion, an increase of $1 billion in two years.
Source: ABC 27 News (Pennsylvania)