The Public School Employees Retirement System board has confirmed it will charge state and local school taxpayers $16.93 for every $100 paid to teachers and other school employees to help make up the long-term deficit in the underfunded pension plan and retiree health insurance assistance.
The rate is rising from this year's 12.36%, effective July 1. The increase had been expected; the $48 billion fund's assets are only 69% of its long-term liabilities, down from more than 100% in the early 2000s, due partly to increased payments authorized by Gov. Ridge in 2001.
The General Assembly is weighing changes that could raise the retirement age, appreciation and service requirements, and end the guaranteed pension in favor of worker-directed 401(k)-style investment plan, but it would still have to pay currently-guaranteed retirement checks.
The pension fund invests money through hundreds of private managers in U.S. and foreign stocks, bonds and private investments. Teachers and other school workers also pay a percentage of their taxpayer-funded wages into the system. But retiree checks have been growing faster than fund income, and state sales and income taxpayers and local property taxpayers make up the difference under state law.