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Corbett signs anti-spiking pension bill into law, could save Allegheny County $1.1 billion

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Monday, Dec. 23, 2013, 4:24 p.m.

Gov. Tom Corbett signed a bill Monday that changes Allegheny County's pension system and is expected to save taxpayers $1.1 billion over 50 years.

The bill, sponsored by state Rep. Mike Turzai, R-Marshall, caps the amount of employee overtime used to determine pension benefits and changes the formula used to calculate payments.

It will affect only employees hired after Jan. 1, 2014.

Supporters of the bill say the reforms will prevent employees from “spiking” their salaries with overtime pay during their final years with the county, which results in bloated pension payments.

Opponents have said the overtime cap should have been left out of the bill and discussed with labor union representatives during contract negotiations.

Pension payments currently are calculated based on the average monthly salary earned during the highest-paid 24 months of the final four years of employment. Under the new law, payments will be based on the average of the highest-paid 48 months during the final eight years of employment.

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