Legislature's failure gives taxpayers a pension headache

[TexasTowelie]

The Pennsylvania General Assembly failed to pass a pension reform bill Wednesday that would have changed the retirement plans for future state government and public school employees. Beginning in 2018, the bill would have allowed new employees to choose from three new benefit plans, a 401(k) plan or one of two hybrid plans that are a combination of a defined-benefit and contribution plan. The legislation would not have affected current or retired employees who are part of the State Employees Retirement System and Pennsylvania School Employees Retirement System. The new plan structure was expected to lower pension payments by the state and school districts by some $2.6 billion over three decades. However, the new plans did not provide any short-term savings, nor did they do anything to lower the state’s $60 billion pension debt.

After four years of being tossed about in the legislative mosh pit we call the General Assembly, a viable pension reform bill had survived, or at least it looked like it had.

But alas, the floor of the Legislature has shown itself, once again, to be a place where good ideas go to die.

Yes, you can place the pennies on the eyelids of yet another promising piece of pension reform legislation.

Read more: http://lancasteronline.com/opinion/editorials/legislature-s-failure-gives-taxpayers-a-pension-headache/article_fd736c5c-9d18-11e6-8853-338d9320e663.html

[wcast]

1. This "pension headache " was caused by the legislature and Tom Ridge.

Our pension was purposefully underfunded for years, with little or no payments by the state or school districts, while employees continued to pay their fair share. Now they expect to "pay" for their tax break off the backs of union members.

Why dont they close tax loopholes, reduce the size of the legislature, or any other viable option? 401 K's will only make wall st and managers rich. Both pensions now do very well with their investments, and always have, without paying money managers.

[TexasTowelie]

2. As a former state employee I understand the necessity of the state paying their share of funds

into the system so that it is sound.

There is a constitutional amendment in Texas guaranteeing a 7% interest rate on investments. Employees pay 6.5% of salary into the pension system and the state agency contributes 6%. The system is funded at 81% although several years ago it was nearly 95% funded.

It's a mixed bag since public employees earn less than what they can make in the private sector, but with the guaranteed ROIs and lifetime health benefits it is a pretty good deal.

[DeminPennswoods]

3. "reform" not aimed at cops though

It's exactly right that when the stock market was booming and the pension fund was actually overfunded, the legislature allowed school districts to skip or decrease their required contributions. When the market crashed in 2008 so did the pension fund. Now the school districts that opted to spend tomorrow's money today have a big funding gap to make up.

State school boards should have been smart enough to realize that what goes up usually comes back down and continued to make their required contributions to the pension fund. I don't think retirees and future retirees should be punished because school boards made stupid decisions.

Further, law enforcement was completely exempt from the "reform".

As for fixing the funding shortfall, cleaning up the charter school law would go a long way toward that end. It's the money districts are losing from having to pay charter school student tuition that's thrown the finances into disarray.

[wcast]

4. Exactly Right!!

Cyber Charter schools take millions of dollars a year from tax payers with little result. Police, prison guards, and whatever historically republican voting bloc are always exempt. The legislature makes themselves exempt from these "changes".

[DeminPennswoods]

5. current legislators didn't include themselves in the reform

just future legislators. I think reps like Jim Marshall, who was an unemployed high school graduate, before being elected like their pensions just fine. Republicans like him ought to be repeatedly asked why the pensions are good for them, but not everyone else.

[modrepub]

6. I've often fantasized about running for the state legislature

my slogan would be "Fire Me" since my platform would be to reduce the number of state Reps and Senators. Would be single term and out. Other items on my list would be:

Make all state representatives and senators pay for their benefits since they are technically part time employees
Redo the road formula to keep tax money close to where it was collected
Abolish the act that funnels PA Turnpike money to other road projects
Fix 422, because 422 SUCKS

Probably never do it.

[DeminPennswoods]

7. my GOP rep is unopposed

I'm writing someone in. Just sayin'...

More seriously, the biggest fix to the lack of road repair/maintenance/construction would be to remove the state police funding line from the motor fuels tax. The new taxes were intended to finance public transit plus transportation infrastructure, but they extra money is being sucked up by the state police budget without even a debate.

The Republicans profess to love law enforcement, so why not make the state police funding a direct line in the budget? They shouldn't have any trouble passing a tax increase to support their beloved police and their police pension fund share.

Wasn't 422 just widened to 2 lanes both ways? Last time I was on it a couple years ago, it was a lot nicer than I remembered decades ago.

[modrepub]

8. Good Point

Yea it would be nice if the State Police bill would be out for all to see but it's always the more affluent and built up areas that supplement the rural interstates like I-99. The whole Philly area is shortchanged IMO. It would be interesting to move the capital to Philly for a month. My bet is a ton of road and mass transit projects would be approved quite quickly.

https://www.facebook.com/422SUX/

I travel this road to and from work nearly every day. It sucks!

[DeminPennswoods]

9. 422 is better than it used to be though

I really don't know why Gov Wolf isn't revisiting tolling I-80. It's almost all through truck traffic. There's no reason the 12 people and 12M deer who live around I-80 can't pay tolls like the heavy users of the Tpk do. It's not like they're Wolf voters anyway.