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= Attempts at Pension Reform in Pennsylvania = Since 2010, a number of bills have been passed to improve pension reform in Pennsylvania.

Act 120
In 2010, a majority of the House and Senate approved a pension reform road map. The provisions of the act include benefit changes for new employees. The act reduced benefits for new employees by more than $33.1 billion.

Provisions Included

The act explicitly states, for the Public School Employees' Retirement System and State Employees' Retirement System, the changes included:
 * Extended the number of years required to be able to receive a retirement benefit from 5 to 10 years.
 * Eliminated lump sum withdrawal of contributions and interest at the time of retirement.
 * Created a new "shared risk" component allowing for increased employee contribution for investment under performance.
 * Increased the minimum requirement for full retirement.
 * Requires members to pay full actuarial cost to purchase prior eligible service.
 * Prohibits the use of pension obligation bonds for funding liabilities.

Specifically for Public School Employees' Retirement System the act shrank the multiplier rate used in the formula to calculate retirement benefits from 2.5 percent to 2 percent. The member contribution rate remained at 7.5 percent of pay. Act 120 raised the retirement age 62 or 65. It limited the maximum annual retirement benefit at no more than 100 percent of the final average salary, which is a provision already included in law for the state employee's retirement system. The act also excluded the purchase of part time service after a one-year window.

For State Employee's Retirement System, Act 120 shrank multiplier rate used in the formula to calculate retirement benefits from 2.5 percent to 2 percent. The member contribution rate for legislators and other effected members stayed at 6.25 percent of pay. The act increased the normal retirement age by 5 years, from 60 to 65. as well.

'Cut and Collar' Pension Plan
In 2013, Gov. Tom Corbett proposed a pension plan that would collar the rate of growth in state payments to free up $175 million. The governor aimed to cut retirement befits for state employees and teachers going forward.

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Provisions Include

Budget Secretary Charles Zogby stated the details of the plan as:
 * Limiting the growth rate in state payments by reducing existing collar of 4.2% increasing to a 2.25%.
 * The final salary for determining benefits would be based on a five year average rather than three.
 * Capping pensionable income at the Social Security base wage
 * The multiplier would be reduced by one-half of one percent for everyone. With the caveat that would be allowed to keep the higher multiplier if they paid more into the system.
 * New employees would be entered in 401K-style plan

These changes would produce lower required state payments. However the plan failed nonetheless. There was not much support in the legislature because it would not produce any savings for state or school districts. Also, it does not pay down the pension debt any faster than Act 120 of 2010. The plan would have zero impact on local property taxes. Joe Markosek, Democratic Chairman in 2014, claims Gov. Corbett's pension reform plan was based off his ideology instead of what makes sense financially.

Senate Bill 1
Introduced in 2015, Senate Bill 1 was an act amending Titles 24, 51, and 71 of the Pennsylvania Consolidated Statutes, which revised pensions for the Public School Employees' Retirement System and the State Employees' Retirement System.

Provisions Include:


 * Provide a choices between two different side by side hybrid pension plans
 * Required any lump sum withdrawal to be actuarial neutral

Act 5
In 2017, Gov Tom Wolf signed a pension reform into law known as, Act 5. The act reconstructs the current pension system for future Public School Employees' Retirement System and the State Employees' Retirement System. The act amends Titles 24, 51, and 71 of the Pennsylvania Consolidated Statutes.

Provisions Include:


 * Replacing the current retirement benefit with three new options that rely on a 401-K plan.
 * Members will have the ability to take lump-sum withdrawals of their contributions and interest.