Pension Primer #6 - Less Bang for Pa.'s Buck: Governor’s Pension Proposal Would Force Taxpayers (and Employees) to Foot the Bill for Retirement Plans with High Fees, Low Returns
Governor’s Pension Proposal Would Force Taxpayers (and Employees) to Foot the Bill for Retirement Plans with High Fees, Low Returns
This week, the Senate Finance Committee is expected to consider legislation that contains portions of Governor Tom Corbett’s pension proposal. One element of the Governor’s plan that appears to have significant support is his proposal to switch future teachers, emergency responders, nurses, and other school and state employees from the state’s current defined benefit pension system to 401(k)-type individual retirement accounts. This pension primer compares the efficiency, or cost-effectiveness, of individual accounts with the state’s current retirement plans. It finds that the Governor’s plan forces taxpayers and employees to foot the bill for retirement plans that are much less cost-effective than the state’s current defined benefit pensions.
Media Conference Call: The call featured KRC Executive Director Stephen Herzenberg, Pennsylvania Treasurer Rob McCord, state Senator John Blake, and National Institute on Retirement Security Executive Director Diane Oakley. Download audio or listen in the player below.