Tuesday, June 30, 2015

PA school pension subsidy will nearly quadruple to $2.3B by 2012-13

New data from the Pennsylvania Public School Employees' Retirement System projects taxpayers' "employer contribution" to school teacher and administrator pensions will more than triple, to 16.4 percent of payroll, by 2012-13. State and scholl district taxpayers split the cost.

PA school pension subsidy will nearly quadruple to $2.3B by 2012-13

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Specialist Arthur Andrews, foreground, works at his post on the floor of the New York Stock Exchange. (AP Photo/Richard Drew)
Specialist Arthur Andrews, foreground, works at his post on the floor of the New York Stock Exchange. (AP Photo/Richard Drew)

New data from the Pennsylvania Public School Employees' Retirement System projects taxpayers' "employer contribution" to school teacher and administrator pension and retiree health care will nearly quadruple by 2012-13, to $3.2 billion, from $595 million this year.

Pensions for retired teachers and administrators are paid partly by investment profits, and partly by teacher payroll deductions; the rest is funded by state and school district taxpayers. Under the current subsidy formula, which takes into account investment profits and losses for the past several years, next year's contribution rate will go up only slightly, to 4.78 percent next year, from the current 4.76 percent, but the rate will make a "dramatic" increase in 2012-13, more than tripling to 16.40 percent, executive director Jeffrey B. Clay warned.

The actual cost will go up even faster than the rate, because the state expects teacher payroll to zoom to $14.1 billion, from $12.5 billion. Clay urged Pennsylvania school boards to set aside money for the increase now, despite the weak economy, because the state is losing money on its pension fund investments as values fall. 




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PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, distefano251@gmail.com, 215.854.5194 or 302.652.2004.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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