- Associated Press - Wednesday, May 13, 2015

Legislation being advanced by Pennsylvania Senate Republicans would seek pension concessions from state government and public school employees hired before 2011. It would ask them to pay a bigger portion of their paycheck to keep a pension enhancement authorized in 2001. Those who elect not to pay more would see the pension benefit calculated on their future earnings reduced to the pre-2001 benefit level. Also, the traditional pension would end for future employees. Instead, they would get a 401(k)-style plan - with an approximately 2.6 percent employer contribution for school employees and a 4 percent contribution for state government employees - and a cash balance plan that would earn up to 4 percent interest.

Here’s how most pensions are now calculated, what some typical employees are getting and how much they contributed toward their pensions:

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HOW PENSIONS ARE CALCULATED

For most members of the state’s two largest pension systems hired before 2011, average pay for the last three years on the job is multiplied by years of service and then by 2.5 percent.

Most members of the school system contribute 6.25 percent of their salary; most members of the state employee system contribute 7.5 percent.

RETIREMENT AGE

For school employees hired before 2011, normal retirement age is 60 with three years of service, or any age with 35 years of service.

For state employees hired before 2011, normal retirement age is 62 with at least one year of service, or age 60 with 30 years of service or any age with 35 years of service.

LAWMAKERS’ CUSHY DEAL

Most lawmakers have a better pension benefit than state government and public school employees. They can retire at 50, with 20 or more years of service, and their benefit multiplier is higher, at 3 percent. For lawmakers elected after 2010: they enter the system with a 2 percent benefit multiplier and a retirement age of 55 years with 20 years’ service.

PENSION PAYOUTS, WHAT THEY PUT IN

Assuming they leave their contributions and interest in the system, here are some examples:

School employees retiring on the average member salary of $52,500 would get a maximum annual pension of about $39,000 after working 30 years. Those who retired in 2013 contributed an average of $71,000, including interest.

State employees retiring on the average member salary of $47,930 would get a maximum annual pension of approximately $35,930 after working 30 years. Those who retired in 2013 contributed an average of $72,550, including interest.

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Sources: The Pennsylvania State Employees’ Retirement System and the School Employees’ Retirement System.

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