Pa. pension: Above average not enough; deficit rising
Pennsylvania State Employees' Retirement System finished 2011 with just 61% of the $40 billion-plus it would need to pay future retirees.
Pa. pension: Above average not enough; deficit rising
Joseph N. DiStefano
The Pennsylvania State Employees' Retirement System, close to "fully funded" in the early 2000s, is falling farther behind balancing its current assets with its expected future liabilities as it pays pensions to lawmakers, judges, state troopers, social workers and other public employees faster than payroll deductions, investment profits and tax revenues can fill the gap. SERS assets totalled $24.9 billion in market value at Dec. 31, down $1 billion during the year despite what SERS managers say was above-average performance by the highly-compensated buyout fund managers (Mitt Romney's rivals) who manage a large chunk of its total investments. That total is just 61% of the $40.6 billion in actuarial accrued liability SERS faced at Dec. 31. The ratio is down from 66% a year earlier. Taxpayers will make up the difference through bigger payments into the public pension system, unless investment values turn around fast.
The board, still chaired (after 20 years) by former State Rep. Nicholas J. Maiale and dominated by appointments of Gov. Corbett and his legislative allies, continues to invest in non-public investment funds in hopes they'll provide better profits than stocks and bonds. In December, for example, they invested $250 million with veteran hedge fund manager Julian Robertson's Tiger Management LLC.
Comments (17)
Ed Rendell's greatest legacy. And does everyone know that when a state employee retires they get ALL of their payroll contributions back in a lumps sum WITH 4% per annum interest? And do we know what qualifications Nicholas J. Maile brings to the table except the fact that his family has been involved in South Philly politics for 100 years?
The poor taxpayer gets what he deserves.— Wilhelm Von Humboldt
Comment removed.- Getting your contributions back is one option, then you take less in your monthly payment.
A lot of those options changed for employees hired after 12/31/2010. They have to have 10 yrs to be vested and retirement age is 65 for those new employees.— Lil Bobby - Entitlements pure and simple. Pensions are fine as long as they are not bankrupted by corrupt incompetant public union employees.— Citizenc92
- PA pension targets are set by the Governor and the General Assembly; funds are managed by private firms and consultants. Citizen, why are you blaming rank-and-file state workers?— Joe D
- Instead of 'wolfing' on State Employee benefits, what about ALL of the Corporate Moguls who were baled out by the taxpayers? Why are there NO complaints about the 'benefits' of the private sector? I'm sure ALL of the CEO's earned every penny of their Golden Parachutes. They layed off thousands of Americans and took U.S. jobs overseas to improve the 'bottom line'. They worked 'hard' and they were NOT Union members. So they deserve to be treated as Gods? They deserve years in jail followed by slow painful death! We should be grateful to the banks & insurance companies for showing us how to fleece the average American.— bad joe s
- You got it! People should read the book by conservative WSJ writer Ellen Schultz. Her book: Retirement Heist. In this book she explains just how private employees were raped and robbed by corporate takeover (think Romney and his BANE, Inc.). She also points out the direct (1:1) correlation between the loss of private employee pension money and the size of senior executive bonuses. Under the rules of unregulated takeovers, accumulated pension funds can be absorbed by the new company as cash rather than pensions. It shows up as profit on the books which makes shareholders happy and drives the CEO bonus.
Read the book.
None of this means that public employee pensions should not change since they should. But, individuals who have been royally screwed by their employers should not blame public employees. Their pensions were stolen by greedy corporations and shareholders not by public employees. ... BTW, for those who are still benefiting from a private pension there is a very high probability that some or all of that pension is being covered by the pension guarantee board, a publicly agency (damn those public employees and govt regs) at least partially funded by taxpayers.— nebulus - Comment removed.
Bad Joe -- very few of these "moguls" you are so jealous of were bailed out by taxpayers. Why should I complain about benefits in the private sector? I am not forced at gunpoint to pay for it.
I get that public workers are not at fault because their union reps negotiated sweetheart deals with their political cronies -- but, just like those who receive stolen goods must return them even if obtained "honestly," so too must we figure out how to reduce an unsustainable pension obligation (and don't tell me "tax the rich" -- they'll all move to somewhere where they won't get squeezed -- and who could blame them?)
And stop bellyaching about the layoffs -- if you can't compete, get educated and learn something that is in demand, like I did when I got the boot. Nobody owes you a job -- you have to earn the right to work every day.
This "average American" did not get "fleeced." What's wrong with you that you did?- "And stop bellyaching about the layoffs -- if you can't compete, get educated and learn something that is in demand"
See here's where you're absolutey incorrect. Companies lay people off so they can move those jobs offshore where they can use slave labor to produce the same items for cents per day. It's not about people being educated because many are educated. It's not about learning something in demand. If that was the case then why can't companies just let it be known what's in demand. It's not about "what's in demand" it's about finding the absolutely cheapest labor costs so they can maximize their profits. It's not the fault of the American people that are abundantly educated and hard working that companies won't invest in America in order to maximize their greed.
— dontlikeneocons - dontlikeneocons: you're right. How do Americans compete with chinese slave labor? 7 day work weeks, 12 hour shifts; dormitory living; $17 per day to assemble iphones and androids.— nebulus
- Why don't they just put them on 401(k)s? To the best of my knowledge most new city employees aren't getting the same pension deals their predecessors were anyway.— Gilliam
Eliminate elected officials from the pension system and the savings will be great.— slugo- The lack of fairness is incredible, even here. Those teachers, fire, police, and other state workers are the cause of our ills--not the corrupt bankers, politicians, and lending industry. Interesting. And for those in the private sector who lament the sweet deal of state pension (I have contributed 7.5% of my GROSS for 18 years...not chump change), were you protesting in the 80's and 90's when private-sector bonuses, 401k's, and other perks made state workers unable to be your neighbors? But forget all that: If I lost my job or wasn't doing well, I wouldn't take solace by making someone else who is doing an honest job have their standard of living or financial security impaired. Where's the humanity in that? Those in the private sector who continue to hate on those who serve the public, why have you joined the ranks and cash in on the "sweet deal?" There are openings to teach in the inner city...any takers?— Pitselehdad
- Julian Robertson's Tiger Management is like having Lee, Halladay and Hamals pitching for the Phillies. The guy's a living legend in Money management.— TreePlanter
View comments: 1
|
2
Popular Posts
About this blog
Joseph N. DiStefano blogs about the latest news in the Philadelphia business community and elsewhere. Contact him at 215-854-5194.
Reach Joseph N. at JoeD@phillynews.com.
Joseph N. DiStefano
Classifieds:
Site Services:
Partners: