Pennsylvania State Senator Jarrett Coleman (R-Allentown) this week introduced a measure requiring colleagues to take defined-contribution (DC) savings plans rather than traditional pensions.
Coleman (pictured above), an airline pilot and former Parkland School District director, won his first Senate election last year on a reformist platform and has since briskly worked to effect change regarding education, election integrity, regulation and other issues. Now he’s asking members of his chamber to consider a policy directly affecting their own bottom lines. He said he believes it’s an important initial step toward more making the commonwealth’s employee retirement programs more solvent.
Many veteran lawmakers continue to avail themselves of a defined-benefit (DB) pension option, the plan broadly offered to government workers prior to a 2017 reform. That year, a Republican-controlled Pennslyvania General Assembly and Democratic Governor Tom Wolf enacted a bill moving new legislators and state hires into retirement plans that are hybrids of 401(k)-style DC plans and the more generous DB type.
Officials and employees can choose to enroll in a DC plan, though relatively few do so. In 2019, The Harrisburg Patriot-News reported that, of the nearly 2,500 state employees hired in the first three months of that year, over 1,900 selected a hybrid plan over a DC option.
When campaigning last year, the senator told constituents he would decline a DB pension and adhered to that vow after taking office, choosing the DC system instead. He reasoned that lawmakers should generate savings through a system comparable to what most private-sector employees have. His bill to mandate that would affect only members of his chamber who are elected next year and thereafter.
“We have to start somewhere,” he told The Pennsylvania Daily Star. “First of all, I just don’t think it’s taxpayers’ responsibility to pay for elected officials’ pension; I think we need to reform the pension system for politicians…. Let’s start here; let’s lead by example….”
Spreading the use of the DC system, he said, is all the more important because of the deficient state of the State Employees’ Retirement System (SERS) in which most state lawmakers participate. SERS data indicate the program is only 70 percent funded and faces a $16.4 billion unfunded liability.
“If we can reduce the amount of people who are in the state retirement system for pensions, we don’t have to keep worry about funding that liability every year,” Coleman said.
The senator touted his measure as one of numerous changes the commonwealth could make to move its lawmakers closer to the citizen-legislator paradigm. Other reforms he would make toward that end include a gift ban, campaign-finance reforms and a part-time-legislature model.
“I think those are all commonsense reforms,” he said.
Coleman’s pension legislation has two cosponsors so far, both Republicans, though he said he believes some Democrats may come aboard. Such cross-party coalescence will be crucial insofar as Democrats control the House of Representatives and the executive branch.
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Bradley Vasoli is managing editor of The Pennsylvania Daily Star. Follow Brad on Twitter at @BVasoli. Email tips to [email protected].
