Senate Bill 1: What You Need to Know
An issue that will impact all millennials is one that our age cohort is not talking about; the burden that we will face as our state and city pension systems go further into debt. Fortunately, Harrisburg took an important first step in attempting to solve the statewide problem by passing Senate Bill 1 which was passed by the House and the Senate with bipartisan support and signed by Governor Wolf last week. Important for Philly Set Go readers to note that all but two of the nay votes came from Philadelphia County in the Senate, Republican Gubernatorial hopeful Scott Wagner was the lone Republican to vote no, saying it didn’t go far enough.
So what does Senate Bill 1 do? Right now it doesn’t do very much because it will only impact future employees of the state starting in 2019. For future employees, SB1 will create a new “hybrid defined benefit/defined contribution plan.” Essentially half a traditional pension plan and half 401K, which has become standard outside the public sector. Over the next 30 years, this should save the state $2-$9 billion dollars.
Having said that, there is still work to be done. While this will improve our outlook in the very long term, the unfunded liability of the State Employees Retirement System (SERS) and Public School Employees Retirement System (PSERS) still sits at $70 billion. While there is plenty of arguing about who is to blame for this, our generation needs to rise above the finger pointing and work toward larger solutions that protect those who were promised retirement packages by our state, but also pays down our liabilities so we can fully fund the system and hopefully end up with more money for our schools, vital services, and economic development. All millennials should pay attention to this conversation because it will be our generation who will be responsible for paying for the decisions being made by legislators today.
In Philadelphia, we have just as much to worry about at the local level. As of this time last year Philadelphia is “$5.9 billion short of its $11 billion pension liability.” Even if the Kenney administration is on target with their reforms, the plan would only be 80% funded by 2031.
This isn’t an easy issue to take on. The voters that pay attention to pension discussions are the ones who vote the most. Millennials like us see it as an issue that doesn’t impact us for another 30 years. This is not true at all. This is why Philly Set Go is working to engage Millennials around important state and local issues and urge our peers to get out and vote so we get the government we deserve.
Senate Bill 1
Governor Wolf Statement – SB1
Senator Wagner Statement –SB1
Inquirer Editorial – Pro SB1
Penn Live Editorial (Central PA) – SB1 should go further
SERS News Update to Members – SB1
PSERS News Update to Members – SB1