Pennsylvania House Bill HB1767

Pennsylvania 2025-2026 Regular Session

• Introduced: 8/4/25
• Refer: 8/4/25

Caption

In membership, contributions and benefits, providing for supplemental annuity commencing 2025; in benefits, providing for supplemental annuity commencing 2025; providing for special funds and for disposition of Budget Stabilization Reserve Fund; establishing the Budget Stabilization Reserve Fund Interest Account; and making a repeal.

Summary

HB1767 would create a new supplemental annuity increase beginning with the first monthly pension payment after July 1, 2025 for certain long-retired members of Pennsylvania’s public retirement systems. The bill amends both the Public School Employees’ Retirement Code (Title 24) and the State Employees’ Retirement Code (Title 71) to authorize an additional monthly supplemental annuity for eligible retirees whose most recent retirement date was before July 2, 2001. The increase is tiered by retirement date, ranging from 15% to 24.5% of the retiree’s monthly annuity as of July 1, 2025, and is paid automatically unless the retiree opts out in writing. The bill also creates a new funding mechanism in Title 72 by establishing a Budget Stabilization Reserve Fund Interest Account. Interest earned on the state’s Budget Stabilization Reserve Fund would be swept annually into the General Fund and then appropriated to pay for the new supplemental annuities. The bill states that the added liability for school retirees would be funded over 10 years beginning July 1, 2026, unless another funding source is provided by law, while the state employee retirement supplement would be funded under the actuarial cost method. It also repeals and replaces a prior Fiscal Code provision governing the reserve fund, while preserving existing actions, contracts, and obligations taken under the old law. The bill’s impact on state law is significant because it changes retirement benefit statutes for both major public pension systems and alters how interest from the state’s rainy day fund may be used. It would affect retired public school employees and state employees who meet the eligibility criteria, while excluding certain classes of service and some multiple-service members. It also changes the statutory treatment of the Budget Stabilization Reserve Fund by directing its interest earnings to support pension supplement payments rather than leaving those earnings solely within the fund. Because no committee transcript or vote history was provided, there is no recorded debate or roll-call sentiment in the materials. Based on the bill text alone, the measure appears designed to provide a targeted cost-of-living style adjustment for older retirees, which would likely be viewed favorably by affected pensioners and their advocates. At the same time, it may raise fiscal concerns for budget writers because it commits future interest earnings and creates an ongoing appropriation stream for benefit payments. The main point of contention is likely to be fiscal policy: whether using Budget Stabilization Reserve Fund interest to finance pension supplements is an appropriate use of state resources, especially during periods of budget pressure. Another possible issue is fairness and scope, since the bill benefits a specific cohort of retirees based on retirement date and service classifications, while excluding newer retirees and certain mixed-service members. The bill also appears to rely on a dedicated funding stream rather than a general across-the-board benefit increase, which may be seen as both a safeguard and a limitation.

Impact

HB1767 would amend Titles 24, 71, and 72 of the Pennsylvania Consolidated Statutes to authorize new supplemental annuities for eligible public school and state employee retirees, and to redirect Budget Stabilization Reserve Fund interest into the General Fund for those payments. It would create a new restricted interest account within the reserve fund, repeal a prior Fiscal Code provision, and preserve existing legal actions and obligations under the former law. The bill would directly affect retired members of the Public School Employees’ Retirement System and the State Employees’ Retirement System who retired before July 2, 2001 and meet the bill’s service and membership exclusions.

Sentiment

No committee discussion or vote record was provided, so there is no documented legislative sentiment in the supplied materials. From the bill text, the measure appears supportive of long-term retirees by adding a supplemental pension payment, suggesting positive reception among retiree interests. At the same time, the funding mechanism and use of reserve-fund interest suggest likely caution from fiscal conservatives and budget officials concerned about recurring costs and the use of state reserve resources.

Contention

The likely controversy centers on funding and budget priorities. Supporters of the bill would likely emphasize relief for older retirees and the need to preserve purchasing power, while opponents may question whether interest from the Budget Stabilization Reserve Fund should be diverted to pension supplements instead of remaining available for emergencies or broader budget needs. There may also be debate over the bill’s narrow eligibility rules, which favor retirees with earlier retirement dates and exclude certain classes of service and some multiple-service members.