House Bill 1581 introduced by Rep. Seth Grove (R-York) took center stage in a number of events Tuesday and could foreshadow the first step in broader pension reform.
The legislation would reform municipal pensions by moving them to a cash balance plan where benefit holders will have individual accounts that are added to in the fashion of a defined benefit plan and paid out in the form of a defined contribution plan. Under the bill the employer contribution would be 4.5 percent and employees would contribute either six percent or nine percent, depending on whether they receive Social Security payments.
According to Rep. Grove, the plan also provides for an avenue to pay off the unfunded liability and remove pensions from binding arbitration.
To find out if the legislation will pass in its current form and how it plays into broader pension reform plans, CLICK HERE.