A Step Worth Taking
6/8/2017
      
When I was a child, I was introduced to the world of “street rods” by my dad, who owned a ’46 Ford. So I jumped at the opportunity to serve as a judge at last weekend’s Street Rod Nationals East at the York Expo Center. My job was to select the York winner, and I chose the beautiful marina blue, ’67 Chevy Camaro SS with the rally sport package owned by Janet Fisher from York Township.

Seeing her car left me dreaming of owning a vintage vehicle like that. Then I thought of the time and money involved in maintaining one of these beauties. Factor in the practicality and the realities of family life and I realize this isn’t the time or place for such an investment. I’m happy with what I drive because it runs, it’s paid for and it helps me do my job. For now, I’ll just imagine the dream car I’ll own someday.

A similar temptation happens in Harrisburg, especially with high-profile issues. Achieving the “dream solution” sometimes involves temporarily being satisfied with what you can get done in the hope that the greater solution to a problem will one day be achieved. A recent legislative example is liquor reform, as authors of the original bill started with a relatively small, hard-fought legislative victory and have advanced from there.

The General Assembly took a historic step this week by passing much-needed pension reform. Under Senate Bill 1, the existing pure defined benefit retirement plan will no longer be an option for state and school district employees that are hired beginning in 2019. Their new choices will include a straight defined contribution plan and two hybrid plans.

Some say Senate Bill 1 doesn’t do enough. I grant you the legislation could go a lot further. We have a significant unfunded liability that must be addressed at some point. Detractors blame this on the Legislature. While the root cause lies in the decisions made by past members of the General Assembly, dwelling on that fact is nonproductive and prevents forward progress.

Others say Senate Bill 1 does nothing. I respectfully disagree. While the majority of Pennsylvania taxpayers are not participants in these retirement plans, their livelihoods are impacted when we continue to offer employees paid with state tax dollars a product (the defined benefit plan) that is not sustainable. This legislation saves more than $5 billion, and the reduction in costs and fees for investment management is estimated to save another $3 billion. By reducing the risk to taxpayers through increased employee contributions, Senate Bill 1 could additionally save between $5-$20 billion, depending on the systems’ investment returns.

Importantly, we are keeping our promises to the hard-working people who have paid into existing plans. Senate Bill 1 honors them by not impacting the benefits of current employees or retirees. With an eye toward making public service more attractive to future employees, I believe we also have an obligation to offer new employees a retirement plan with increased flexibility. The choices of retirement plan these new employees will have under Senate Bill 1 are more attractive because they are portable and can move with the employee, should they choose to leave public service for another line of work.

Senate Bill 1 is a step worth taking but it cannot - it must not - be the final step. In addition to addressing the unfunded liability, there are entities whose participation in the state retirement system is questionable. For example, I am waiting for the Senate to act on House Bill 205, my legislation that would prevent future employees of the Pennsylvania School Boards Association from enrolling in the Public School Employees’ Retirement System, as they are not public school employees. I also support House Bill 922, which would prohibit future employees of the Susquehanna River Basin Commission (SBRC) from being members of the State Employees Retirement System. SBRC employees do not work for the state of Pennsylvania.

Former Secretary of Defense Donald Rumsfeld once asked that we “treat every federal dollar like it was hard earned. It was…by a taxpayer.” The same rationale is true for our state dollars, and every measure of pension reform we can take benefits the people of Pennsylvania. Passing Senate Bill 1 is a limited yet important step in our efforts to achieve future pension stability. You have my promise to champion responsible pension reform at every opportunity.


Representative Kristin Phillips-Hill
93rd Legislative District
Pennsylvania House of Representatives

Media Contact: Scott Little
717.260.6137
slittle@pahousegop.com
RepKristin.com / Facebook.com/RepKristin


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