House Bill 316: At A Glance

Read The Bill

UPDATE: Our municipal pension reform legislation has been amended into a new vehicle – House Bill 414. On November 18, the Senate Finance Committee voted to incorporate the language of HB 316 and SB 755 into HB 414, a bill that has already passed the House.

Please see our new blog outlining House Bill 414.


Unlike the current defined benefit pension plans, the Cash Balance Plan will reduce employer costs by providing a reliable benefit structure, a modest benefit reduction, and a stream of revenue devoted to paying the unfunded liability of the current defined benefit plans (legacy pensions). These changes result in sustainable public safety pensions.

The Cash Balance Plan applies to future police officers and firefighters only.

Current police officers and firefighters maintain all existing rights and benefits; these benefits are frozen at current levels.

Instead of a pension benefit formula based on a percentage of final average salary in the last years of service, the Cash Balance Plan benefit is comprised of base pay, contributions by both the employee and employer, and employer guaranteed investment earnings.

Under Cash Balance, pension benefits are not subject to collective bargaining and therefore cannot be changed/increased locally.

Each employee with a Cash Balance pension has an “account balance” within a larger, locally administered plan fund.

Retirement eligibility is increased to age 55 and 25 years of service.

Public Safety Employees with Cash Balance pensions have the ability to change municipal employers and take their pensions with them. Pension portability is very difficult under the current defined benefit structure.

The Cash Balance Proposal applies to cities, boroughs and townships employing full-time public safety officers; it excludes Philadelphia.

The Cash Balance Proposal is the only plan type in the PA House that provides an avenue for paying down the unfunded liability (legacy pensions) that is causing municipal pension distress. This pay down is required and occurs when investment earnings exceed the interest the employer guarantees the plan members.