Pension Primer #3: Long-term Savings in 2010 Pension Reform Law Hard to Beat
Keystone Pension Primers: As Pennsylvania policymakers, media, and citizens evaluate Governor Tom Corbett’s pension proposal unveiled February 5, 2013, the Keystone Research Center will release a series of short “pension primers” to demystify the often complex details at the heart of the pension debate. This is the third installment in that series.
Pennsylvania policymakers made good progress on pension reform with the passage of the “Pension Reform Act” in 2010. As a result of this law (officially known as Act 120 of 2010):
- Pennsylvania achieved low-cost pensions for new school and state employees by cutting benefits by over 20%;
- Taxpayers were protected with a “risk sharing” provision that increases employee contributions if an economic downturn reduces pension fund investment returns; and
- Pennsylvania public employees continue to contribute more to their own pensions than public employees of most other states.