SB 1 Would Make Young Workers Pay for Politicians' Mistakes

Gov. Wolf has indicated his willingness to modify pensions for future Pennsylvania public sector workers by using a variant of the "stacked hybrid" design proposed in 2013 by Pottsville Republican Rep. Mike Tobash. Negotiations of a compromise pension deal, however, remain stalled because Senate leaders remain committed to their own redesign of Pennsylvania pensions, SB 1, passed by the legislature at the end of June but vetoed by Gov. Wolf. One criticism of SB 1 has been that, even with improvements proposed by Senate leaders, SB 1 would cut benefits by up to two thirds for career workers. This would leave three of six career workers examined by the actuary for the school employees' pension with annual benefits of less than $10,000. This brief offers a new perspective on the adequacy of SB 1's benefits by comparing them to (a) those provided by typical private sector 401(k) plans; and (b) other public sector benefits across the country.