Pension reform designated as Senate Bill 1 for second straight session

Harrisburg – A much-anticipated pension reform proposal from the Senate was formally introduced Thursday, getting the designation of Senate Bill 1 for the second straight session.

The designation of “Bill 1” in either chamber is traditionally set aside for legislation of the highest public importance or as a symbolic measure to articulate the priority of the majority caucus.

Pension reform legislation received the designation in the Senate in the 2015-2016 legislative session. In the 2013-2014 session, the Senate gave Senate Bill 1 to a transportation funding reform measure, which was a high-profile topic at the time.

The House has not given out a House Bill 1 designation to any legislation since the 2011-2012 session, where tort reform, under the moniker of “The Fair Share Act,” was proposed.

In the session before that, House Bill 1 was assigned to legislation sponsored by then-House Majority Leader Todd Eachus (D-Luzerne) that would have expanded adultBasic health insurance.

The bills have a historically poor record of making it to enactment under their original designation. The most recent Senate Bill 1 to reach enactment was legislation sponsored by then-Senate Majority Leader Dominic Pileggi (R-Delaware) in the 2007-2008 legislative session to create what is now the Office of Open Records and the Right to Know Law.

Since the 2001-2002 legislative session, no House Bill 1 has been signed into law.

That being said, many of the proposals do get amended into other laws. One case in point: the 2009-2010 session’s Senate Bill 1, legislation sponsored by Sen. Pat Browne (R-Lehigh), which would have created the Legislative Fiscal Office. The proposal was eventually included in Act 120 of 2010 that created the Independent Fiscal Office.

The pension reform legislation sponsored by Senate President Pro Tempore Joe Scarnati (R-Jefferson), Senate Majority Leader Jake Corman (R-Centre), and Senate Appropriations Committee Majority Chairman Pat Browne (R-Lehigh) has been of highest importance to the Senate Republican caucus for nearly the last three legislative sessions.

The proposal, according to a memo released by the senators, is essentially a reboot of the proposal that was voted out of conference committee at the tail end of the 2015-2016 legislative session.

That bill's actuarial analysis said the reforms would change the current defined benefit plan for future hires by providing a choice between two different side-by-side hybrid pension plans with different contribution rates and multipliers and a straight defined contribution plan.

The plan would also make a number of other changes, including altering the vesting period; requiring any lump sum withdrawal to be actuarially neutral; extending the shared/risk shared gain provision of Act 120; and providing new actuarial funding provision, among others.

At the time, it was said the legislation could possibly save between $200 million and $2.6 billion over a 30-year period while shifting 60 percent of the risk from taxpayers to benefit holders.

Last session’s bill failed to materialize to a floor vote in either chamber after a loose coalition of House members failed to hold together amid arguments that the proposal does not do enough to pay down the current unfunded liability while sacrificing a more-than-competitive benefit package for future state workers and public school teachers.

The current bill does have one significant change over the bill considered last session: a provision that would allow all current SERS and PSERS enrollees to switch to one of the new plans.

That change has required a new actuarial analysis from the Independent Fiscal Office.

Senate Bill 1 has been referred to the Senate Finance Committee but has yet to be scheduled for a vote.

Jason Gottesman is the Harrisburg bureau chief for The PLS Reporter, a non-partisan, online news site devoted to covering Pennsylvania government.