The Pennsylvania legislature has to correct the $50 million unfunded liability in the state pension fund because it is the biggest burden on state finances, one group says.

Another group said the funding mechanism that was changed and caused the debt was changed back, and the liability will correct itself over a period of time.The hottest issue in state government was debated by both sides at a legislative roundtable held by the Northeast Pennsylvania Manufacturers and Employers Association on Friday morning at Top of the 80s in Sugarloaf Township.New billA bill introduced by state Rep. Mike Tobash, R-Pottsville, would channel new state employees into a 401(k)-style defined contribution pension plan, to relieve the financial burden on the defined benefits plan already in place."The plan that we put forward saves between ($11 billion and $15 billion), and as much as $40 billion," Tobash said. "We have to change the system to take some of the risk away from the taxpayer and the Commonwealth."Tobash said he has been traveling all over the state to talk about his plan, which he describes as a "hybrid" of the current system which can't be completely changed because pensions were negotiated into many current contracts with state employees."I sat with a young couple, 32 years old, at a dinner last night," Tobash said. "I asked do you think you are going to receive your Social Security? You know what 10 out of 10 people tell me? No. They want the 401(k), where they get the money at the time of the service. They don't want the Commonwealth to be their fiduciary for their retirement money 35 years down the road."Where it startedState Rep. Eddie Day Pashinski, D-Wilkes-Barre, said the pension crisis began in 2001 when the legislature changed the funding multiplier from 2 to 2.5 percent"Prior to the change, the defined benefit pension plan was 130 percent fully funded," Pashinski said. "Over a 10-year period, the state decided not to pay the full amount they normally would pay. Because the market was doing so well, they said why should we put our money into it. We have enough money now. Nobody understood what was going to happen in 2008 with the crash. That was the final straw that broke the camel's back."The legislature later reversed itself and changed the multiplier back to 2 percent, which Pashinski said, in time, will correct the unfunded liability in the pension fund."We completely corrected the error made in 2001, Pashinski said. "All of the fiduciary numbers indicate that it will correct itself over time. What we are missing is the infusion of $9 billion in order for the system to be able to invest at the level necessary to bring back the investment properly."The $9 million he referred to is the contribution of new employees who would be channeled out of the plan.Action needed nowBut Tobash and state Rep. Doyle Heffley, R-Palmerton, said action has to be taken now because of the financial burden pension payments are placing on the state's economy."I have a school district in Carbon County where 45 percent of the property tax is just to fund pensions," Heffley said. "My father worked at Bethlehem Steel for 36 years and they went bankrupt. He didn't get his pension, but his taxes are going up every year to pay for pensions."Heffley said the pension situation is affecting the quality of education in Pennsylvania."We are looking at increasing education $2,000 per pupil just to pay or meet current pension obligations," Heffley said. "What's robbing our kids of a quality education is the pension debt and mismanagement at the state level for the last 15-19 years. We can either adjust, and put education and kids first, or pander to political influence and continue as it is, and tax people out of their homes."Bad for businessTobash said employer costs are going to bog down business."In the next four years, pensions costs will be 32 percent of payroll," Tobash said."Can anybody here work for a business that can sustain 32 percent of payroll from employer contribution costs?"State Rep. Mike Carroll, D-Avoca, said the Tobash plan does not solve the entire $50 billion liability."The employer (the state) did not meet the task of funding the pension plan," Carroll said.All along, Tobash has stated his plan will not completely correct the problem, but is "a start" to finding a solution.