Kampf Introduces Bills to Reform State Pension System
HARRISBURG-- Rep. Warren Kampf (Montgomery/Chester) introduced two bills that would require future state and school district employees to enroll in an employee-directed defined contribution plan, similar to 401(k) plans prevalent in the private sector, rather than a defined benefit plan.
“This important legislation removes the burden from taxpayers for market fluctuations and historic mishandling of pension obligations for future employees,” Kampf said. “Further, it would offer existing employees the option and an incentive to freeze their benefits, which have in the past been protected by our courts, and switch to a defined contribution plan.”
House Bill 2453 addresses state employees, while House Bill 2454 addresses school district employees.
“The current defined benefit system is unsustainable,” Kampf said. “It is critical that we stop expanding a program that is crippling the finances of school districts across the state.”
At the end of the last fiscal year, Pennsylvania's pension funds for state employees and for school employees were underfunded by more than $30 billion.
“This issue, perhaps more than any other, will continue to have a negative impact on government and school budgets,” Kampf said. “By enrolling new employees in a defined contribution plan, and at least giving the option to existing employees, whose benefits are protected by the courts, we are moving in the right direction for the Pennsylvania taxpayers. This defined contribution system is fair to taxpayers, easier for governments and school districts to budget for, and gives control of retirement funds to enrollees in the system.”
State Representative Warren Kampf
157th District, Pennsylvania House of Representatives