By Tony Romeo
HARRISBURG, Pa. (CBS) - The majority leader of the Pennsylvania Senate has announced that he will introduce a bill that will make major changes to the pension system for future state and public school workers.
Chester Republican Dominic Pileggi, the Senate majority leader, will introduce legislation that would eliminate the current defined benefit pension plan for all state and public school employees hired after December first of this year, putting them into a defined contribution plan, similar to a 401(k).
But Pileggi’s spokesman Erik Arneson says this proposed change does not address the spike in pension costs looming in the next few years.
“This is a key component to addressing long-term pension costs. There will be significant short-term costs, no matter what the state does. There are ways to address that, that are being developed working with the governor’s office and with the House.”
For example, Arneson says borrowing to spread out the costs over future years is one possible approach to dealing with the short-term pension crisis.