Another Municipal Pension Reform Plan

Another Municipal Pension Reform Plan

piggy bank

We wrote back in March that the state Legislature had reintroduced legislation to move new municipal hires into cash balance pension plans, staking out a middle ground between a defined benefit and a defined contribution system for uniformed and non-uniformed workers at the municipal level in Pennsylvania.

Now this week a new measure has been put forth that would affect public safety municipal workers only by putting new hires into a defined contribution system.  There is no link to the legislative proposal currently on the General Assembly’s website, but a co-sponsorship memorandum provides a summary of the proposal.  Among its other features would be to end spiking, take pensions out of collective bargaining, and, as with most pension reforms, would not touch current employees.  Based on 2013 data in Allegheny County there were 2,097 active members in 108 police pension plans and 629 firefighters in 9 pension plans.  All of these plans were defined benefit type plans with the exception of one plan covering one employee.

It is interesting to note that in a news article on the topic that the Mayor of Pittsburgh, who is a proponent of the reforms and has a long history with the topic, analyzed the problem in the context of election cycles over the next three years an noted “…if we blow this opportunity, it may not come back again”.  Interesting to ponder what the Mayor’s opinion of the Governor’s task force that was appointed in May to come up with recommendations is.