HARRISBURG, Pa. (AP) — Making newly hired school and state employees enroll in a 401(k)-style plan would not seriously affect Pennsylvania's two largest traditional pension funds, so long as a new plan is adequately funded, administrators told lawmakers Wednesday.
"Any plan has to be well-structured and well-funded," Dave Durbin, executive director of the Pennsylvania State Employees' Retirement System, told the Senate Appropriations Committee.
As part of a package of wide-ranging pension reforms, Republican Gov. Tom Corbett advocates requiring newly hired state and school be enrolled in a plan in which they would contribute at least 6.25 percent of their salary and the state would provide a 4 percent match.
Corbett also proposes cutting future benefits for current employees to achieve nearly $12 billion in savings over 30 years, and temporarily limiting increases in taxpayers' contributions to the pension funds, which have an unfunded liability of $41 billion.
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