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Goal scaled back

Corbett renews effort to pare back pensions

HARRISBURG — Gov. Tom Corbett is making a new effort to persuade lawmakers to pare back public employee pension benefits, but the scale of the savings and changes he is seeking appear more modest than the more ambitious proposal that collapsed in the Legislature last year.

Corbett’s budget secretary, Charles Zogby, said Monday the administration is studying a “hybrid” concept that would save $7.4 billion over 30 years in pension benefits for state and public school employees. In a departure from last year’s proposal, it would preserve the traditional pension for lower-salary employees and shift retirement benefits that are based on earnings over $50,000 a year into a 401(k)-style plan.

Various retirement systems are experimenting with hybrid plans, and Corbett’s proposed changes would target only future employees under the Public School Employees’ Retirement System and the State Employees’ Retirement System.

A 2011 report by the Center for Retirement Research at Boston College concluded that 401(k)-style plans are best as a supplement, not a replacement, to traditional pensions in public-sector retirement systems.

The authors, who were all associated with the center, said many public employees with more modest salaries would still be fully covered by the traditional pension under a system that capped pension coverage at $50,000. But they said such a cap would eliminate the negative publicity that can be associated with taxpayer-paid pensions for highly paid public officials, such as university presidents.

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