Harrisburg, PA 17110, USA
1-866-GOPSCOA
social@pscoa.org

Rep. Glen Grell – Pension Reform Proposal on Monday

Rep. Glen Grell – Pension Reform Proposal on Monday

Rep. Glen Grell to unveil a pension reform proposal on Monday

Jan Murphy | jmurphy@pennlive.com By Jan Murphy | jmurphy@pennlive.com

Email the author | Follow on Twitter
on September 27, 2013 at 1:49 PM, updated September 27, 2013 at 10:39 PM
pension reform.jpg

The plan, which he will detail at Capitol news conference, is said to take a different approach from what Gov. Tom Corbett proposed earlier in the year and from the defined contribution plans for new hires that have been proposed to date.

“The goal is to address the totality of the pension problem we’re facing in a comprehensive way that’s fair to taxpayers, retirees, current members and all the different constituencies,” said Grell, R-Hampden Twp.

But he assured that nothing in the plan would affect the benefits of current state or school retirees.

“In fact, our focus on retirees is to make sure nothing is done to the plans through our actions or lack of actions to jeopardize their future retirement benefits,” Grell said.

GLEN GRELL HEADSHOT.jpgRep. Glen Grell, R-Hampden Twp.

The state’s two pension plans are facing a $41 billion gap between their assets and the future benefits they are obligated to pay out. Addressing how to pay for that unfunded liability is a focus of the pension reform efforts.

Taxpayer-funded contributions needed to close that gap are expected to double or triple throughout this decade before leveling off, which pension reform proponents say will take up a larger share of state’s and school districts’ budgets, making it harder to provide core services and programs without large tax increases.

Grell declined to share specifics of his proposal until the news conference, but said generally that it establishes a new pension plan design for future employees.

It addresses the complaint from labor unions about the commonwealth underfunding the pension plans for 10 years, he said. It also asks for current employees to voluntarily agree to some modification in the way they take their benefits when they leave state or school employment.

Steve Herzenberg, executive director of the labor-supported Keystone Research Center in Harrisburg, who was among the critics of the governor’s pension reform proposal, looks forward to hearing the details.

“Anyone who is making a good faith effort to be creative and constructive should be listened to,” he said.

Herzenberg has advocated the state build on the reforms it made in 2010, which provided some short-term relief to pension bills, and look at ways of finding revenue to fund the pension systems going forward by ending tax breaks for businesses and issuing pension obligation bonds that can now be borrowed at lower interest rates and invested to make a higher return.

Grell faulted the governor’s plan for failing to include borrowing money to help pay down a portion of the unfunded liability to make up for the years of it underfunded the plan. That, he said, might encourage unions to accept some concession on plan changes.

Republican legislative leaders have been briefed on his plan and agreed to discuss it with the caucus once it is introduced, Grell said.

Grell, who had a hand in developing the 2010 pension reform plan, was appointed this year as the House Republicans’ pointman on the issue. He was named chair of a caucus pension reform task force to examine the issue. However, Grell said this proposal is all his own.

“I spent the summer talking with anyone who would listen,” Grell said. “I engaged with labor and various organizations and we’ve crafted something I hope will be appealing to all the different constituencies and enough of my colleagues to get some traction.”