Municipal Pension Reform

The League supports reform of the future pension benefits provided to police officers and firefighters. The current mandated defined benefit plans are not sustainable for a number of reasons including an early retirement age, the impact of Act 111 agreements and awards and the placement of investment risk solely on the employer.

Representative Keith Greiner has introduced House Bill 2081.  It makes changes to municipal pensions based on Auditor General DePasquale’s 2015 Municipal Pension Task Force Report to Governor Wolf.  Provisions of his bill for new hires include – capping overtime at 10% of salary; basing final average salary on the last 60 months of service; and increasing the retirement age to 55 years and 25 years of service for uniformed employees. 

Other provisions include – reducing the assumed rate of return on pension investments over 10 years to a more attainable rate; requiring the use of GASB accounting standards; prohibiting the use of pension state aid for plan administration; requiring disclosure of pension costs; prohibiting Deferred Retirement Option Plans (DROPs); and prohibiting plan changes that would result in plan funding dipping below 80%. This proposal does not change the type of pension available to uniformed employees or the benefits currently provided under Act 600 or the Third Class City Code.