PA Senate leaders: End state, teacher pension guarantees
Sunset for SERS and PSERS
PA Senate leaders: End state, teacher pension guarantees
Joseph N. DiStefano
In Pennsylvania, state senate leaders want to stop guaranteeing pensions for future state workers and teachers. Here's why:
The Pennsylvania State Employees' Retirement System and Public School Employees' Retirement System are proud achievements of 20th Century state government.
Like similar plans in other states, SERS and PSERS have enabled hundreds of thousands of hardworking teachers, police officers, prison guards and social workers to retire on up to 70% of their maximum yearly wages, keeping them in their homes and cars and restaurants and off the streets -- while also guaranteeing private-sector-executive-style six-figure annual payments. plus medical benefits, to ex-judges, Penn State sports coaches, assistant school district administrators with extra degrees and four-word titles, double-dipping General Assembly members, and other privileged members of the bipartisan public-employee elite.
Public pensions are like paper currencies: They work well when managed by principled fiscally responsible people, if you can find them, but are vulnerable to political decisions to boost spending, cut income, and leave the program unsustainable for future generations.
Pennsylvania is a prime offender: Under former Gov. Tom Ridge (R), the state in 2001 boosted pensions even as it cut taxpayer support. (Public workers also pay more than 6% of their paychecks into the fund, but it's not enough to pay all the future checks.)
To replace lost state revenues, the plans hired hundreds of expensive private-sector money managers, some of them political donors, to jack up assets.
That hasn't worked. The result is a multibillion-dollar and growing shortfall between what the pension plans have amassed and what they're going to have to pay hundreds of thousands of surprisingly healthy retirees for decades to come; along with rapidly increasing demands on taxpayers that are driving local school taxes up, outraging citizens.
Gov. Ed Rendell (D) very late in his administration was prevailed upon to trim state pension costs by raising the collection age to 65 and doubling the minimum service period to 10 years.
And yet the gap widens, and pensions are forcing state and local tax spending higher. So now the Republicans who run the State Senate, led by Sen. Dominic Pileggi, R-Delco, say they are introducing legislation to kill the guaranteed-pension system, effective for future state and school employees after this year, and replace it with a private-sector-style, 401(k)/403(b)-type program where it's up to amateurs (retirees) to pick stocks and funds and tighten their belts when the market goes south. Though their own pensions and those of current constituents will be safe. More here.
go figure. republiclan politicians attacking the middle class....again.— slanted and enchanted- go figure, the article doesn't mention how (D) Rendell floats millions in bonds at 6% and invests the money in the stock market thinking they could catch a favorable spread between the 6% coupon and the stock market returns, all net of fees. Goodness, wonder why folks can't trust institutions like government and journalism. — tg
- It's funny how these people against healthcare, pensions and benefits for the regular workers, never cut their own.
If all the republicans think every perk is ripping off the taxpayers, they should lead by example and forgo their own perks.
All of this stuff would be solvent if the lawmakers didn't raid the funds years ago.
- The pensions are way too much but mostly for elected and appointed officials who do get the 6 figure pensions.
- The average for a PA state legislator is $34,000. That's $1,000,000 by age 80.
- The average pension for a state employee is $23,000 or $500,000 by age 80.
- PA state legislators can begin collecting pensions at age 55 (upped from 50 in 2010).
- Civil service employees can begin collecting at age 65.
Thank repubelican goobernor Tom Ridge for the biggest hit to pension funds. Thank Tom Ridge and democrap goobernor Ed Rendell for the extreme privatizing of the pension money management to big donors and supporters who charged big fees.
Thank Ridge, Rendell and the state legislators as well (DON'T FORGET THE WHALE SNOT SUPREMES) for the extreme greediness. And thank all of the above for failing to properly fund the pensions fund system from the beginning.
Taxpayers AND future public employees and teachers may take the hit for the abject failures of our elected officials but don't blame them.— nebulus - Yellow journalism.— Yodude2
Comment removed.- Comment removed.
- Seems reasonable to critique the 401k system, which was designed for high earners to supplement their pensions (and not to be the primary nest egg for middle and working class retirees); while also decrying the equity of rich people getting richer off many, many little 6% contributions as well as the democratic value of rewarding your rich friends (and thus punishing your middle class enemies). I see no contradiction here...screwing people out of their pensions might win you a few political points during this "starve the beast" tea party frenzy cooked up by Bush et al. but it hardly seems like a long term strategy for keeping personal consumption levels high. — bobcitydoc
- The writing on the wall is that the people of Wisconsin are in the midst of a recall election because they're disgusted with Walker's rape of public workers. The Koch brothers have, in a panic, pumped in enough money that Walker may save his job, but several other legislators have already been recalled for being in cahoots with them.
As usual, Cleanup, dubious facts and no comment concerning senate leaders' failure to cut their own pensions first.— Stand for Something - Read the byline:
"Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer."
A blog is not a "news piece" it is an opinion piece.
So why wouldn't DiStefano insert his opinions in his own blog?
- These should have been eliminated decades ago.— kelprod2
- Those of us out in the "real world" (non-government workers) do just fine with our 401k plans. I guess the author is saying that government workers are much dumber than us, since they will be eating less and thrown out on the street because they can't do as well as the "smarties" who picked investments so well in the government run pensions. Oh wait, the problem is because the "smarties" didn't pick so well... So which is it? How about they just put the cash in Al Gore's Lock Box at 0% interest - can't lose money then, right? That's zero risk, right? (Oh wait...)— ObamaSolyndra
- The current pesion system is a scam against the taxpayers.— workin365
- Getting this passed would be a heavy lift. So in a show of great leadership how about the legislature removes themselves from the pension program keeping what they have currently accrued then effective next election enter into a 401k style plan.— chham57
- I am fine with public pensions as long as the employees are responsible for any unfunded liabilities not the taxpayer.— flyers2thecup
