CatOfTheDecade t1_ja33lfo wrote on February 26, 2023 at 2:16 PM

Was it Ridge or Rendell who ordered the state to stop paying their share of the pension fund contribution?

thenewtbaron t1_ja3dzpd wrote on February 26, 2023 at 3:33 PM

Ridge started it, Rendell continued it.

The shitty part, is that if they paid in like a normal company 401k, you know, matching up to a certain point.... The pension system would be fine. You have to invest even in the crappy market because eventually it won't be crappy. And that thing you bought forn50$ now costs 500$.

Even matching half up to the rate the pa employees put in retirement would be 3% and the state didn't even pay that in for like 29 year

CatOfTheDecade t1_ja3o19z wrote on February 26, 2023 at 4:41 PM

Not sure why you're being downvoted, but this is exactly how investments work. You keep contributing even when SHTF because nuances of your investments notwithstanding, you're buying $500 shares for $50.

There's a point where given average annual returns of x% over any given ten-year rolling period, the pension becomes self-funding. If employees are vested for y # of years, it becomes impossible for any employee to withdraw more than their contributions (and the resulting compound interest) contributed to the fund.

Pensions are fundamentally sound. It's corruption and mismanagement that kills them.

ktxhopem3276 t1_ja3biwx wrote on February 26, 2023 at 3:16 PM

It’s complicated. In 2001, Ridge increased pensions on his way out the door. He created the “pension kings” category. Rendell didn’t get the legislature to fund those pension kings so we went from a surplus to a deficit under his tenure. On his way out the door he cut pensions in 2011. Wolf cut pensions again in 2017.

https://www.pennlive.com/politics/2017/06/pa_pension_reform_bill_what_yo.html

Under all scenarios, the fiscal analyses tell us, the workers coming into employment will rest on a new third-tier benefit that is lower than the pension kings living off of Act 9 from 2001, and the post-2011 hires using Act 120.

The Independent Fiscal Office found that under the best-case scenario, a career worker with a final year salary of $60,000 would see a benefit that equals from 82 to 84 percent of a similar worker hired today.

That would equate to a replacement of pre-retirement income of about 55 percent to 57 percent. Coupled with Social Security, that would get our worker to about 90 percent.

Supporters of this bill note that is a good benefit, still well above the 80 percent level than many financial advisors say workers should shoot for. But critics of Senate Bill 1 see a fundamental unfairness in making today's teenagers pay for the mistakes of past elected officials.