Pension bill fails to address the real problem
After underfunding school employee pensions for more than a decade, Pennsylvania lawmakers passed legislation that asks teachers, bus drivers, nurses, and state workers to pay for Harrisburg's past mistakes. The bill is now on Gov. Tom Wolf's desk for consideration.
Senate Bill 1 saves taxpayers nothing in the short-term and does almost nothing to reduce the pension debt legislators have racked up. The bill:
- Enrolls new hires in less efficient 401(k)-type plans, slashing their future retirement benefits by up to 70 percent
- Adds to the pension debt and threatens the retirement security of all school professionals
- Doesn't save a dime in the state budget
"This bill rolls the dice on the retirement security of hundreds of thousands of hardworking Pennsylvanians and uses their futures as a bargaining chip in budget negotiations to avoid paying the pension debt legislators racked up," PSEA President Mike Crossey said. "There are no winners here. This bill doesn't save a dime in the state budget, but it threatens the retirement security of middle-class workers."
For more than a decade, lawmakers put their pension payments on a credit card, failed to pay on the principal, and in large measure created the pension debt we now have today.
At the same time, teachers and other public school employees contributed a significant portion of their salaries toward their retirement - never missing a payment.
Rather than coming up with complicated schemes that force working people to pay for their mistakes, lawmakers should adopt measures like a natural gas drilling tax to better fund our schools and pay down the pension debt they racked up.
"To truly address the pension problem, legislators need to obey the law and pay what they owe to the pension systems," Crossey said.