The bill (House Bill 2497, now known as Act 120 of 2010), essentially rolls back pension enhancements approved in 2001. It increases from five to 10 years the time it takes for newly hired employees to become vested and delays the retirement age to 65 from 60 for state employees and 62 for school employees. It rolls back the multiplier used to calculate pension benefits to 2% from 2.5%, according to PennLive.com.
It also prohibits new employees from taking a lump-sum payment of their contributions upon retiring, and adds a requirement that employees pay a higher contribution rate if the pension fund suffers losses. It also reamortizes the state’s pension system’s existing liabilities over 30 years through an Actuarial “Fresh Start”
Governor Rendell had previously estimated that the bill would save the state $16 billion in pension payments over the next 25 years.
It also creates an independent fiscal office that will provides nonpartisan budget projections to the legislative branch, which previously was reliant on the executive branch to provide those projections.
A detailed evaluation of the impact on Pennsylvania’s State Employees’ Retirement System is at http://www.portal.state.pa.us/portal/server.pt?open=512&objID=14364&PageID=432888&mode=2&contentid=http://pubcontent.state.pa.us/publishedcontent/publish/cop_general_government_operations/sers/sers_internet/news___media/articles/20101124_news___member_update__governor_signs_pension_reform_legislation.html
An evaluation of the impact on Pennsylvania’s Public School Employees’ Retirement System is at http://www.psers.state.pa.us/hotnews/HB2497%20Benefit%20Changes%20Summary%2011162010.pdf