Submitted by greenhousecrtv t3_11c6n94 in Pennsylvania
ktxhopem3276 t1_ja4agpt wrote
Reply to comment by ScienceWasLove in Pennsylvania Makes Progress Toward Public Employee Pension Sustainability by greenhousecrtv
As annoying as I find your “wolf fucked over teachers” narrative, this overall was a good conversation for me to learn more about the system. I’m not in support of any more cuts and I think the 2% rate would have been a good middle ground but the state budget is in bad shape and I think the new model with half pension and half 401k and higher starting salaries is the right mix to save the system. The bigger issue in the future is going to be the state funding lawsuit that is going to really throw a monkey wrench into the school funding formulas.
ScienceWasLove t1_ja4mld8 wrote
There is absolutely no model for “higher starting salaries”. Salaries are determined district by district.
Perhaps Pittsburg did raise staring salaries because of the pension change, I have no idea if that is true. However a higher stating salary (if true) and an 11 year salary schedule is attractive. But the Pittsburg district also has $5,000 sign on bonuses right now….
ktxhopem3276 t1_ja4tv2a wrote
they should raise starting salaries and let teachers have their money immediately instead of locking it up for years. Teachers don’t even pay the maximum social security benefit cap. The more people that rely on social security the better support it will get. When teachers and mailmen and other government employees carve themselves out with special pensions, that creates a division in the working class that makes it harder to mount a unified fight against special interests and big business
ScienceWasLove t1_ja4vzjr wrote
Some principals and most superintendents and some other central office admin hit the max benefit. If they were capped, there would be money to go around.
ktxhopem3276 t1_ja4w9v4 wrote
Not much more. It’s the shape of a pyramid with only a few at the top.
ScienceWasLove t1_ja4p787 wrote
I have been a paying union member for 22 years. Part of the AFT, PFT, PSEA, and NEA. Plus a former Teamster.
The PSEA spent many many PACE contributions promoting Gov Wolf before he was elected and while he was elected. In the PSEA magazine he was getting full spread articles about how great he has been for public education.
The union is very pro democratic politicians for very understandable reasons.
The pension reform, which he vetoed, will absolutely impact the quality of retired life for all new teachers moving forward. Some will use the saved DC funds (403b) wisely, most will blow through it very quickly, and be left w/ a pension that is HALF what their predecessors got.
Yes, Wolf screwed the teachers pension wise, and he didn’t have to. The state workers also got screwed. Some of my colleagues know this but many have no clue this change occurred, or the finical implications of this long term.
Corbet attempted to do the same, but he never signed off on pension reform because democrats would have lost their minds. Wolf was a useful idiot for the Republicans.
They could have done the following:
- set a CAP on maximum salary (like social security)
- changed the 3 average formula to a 5 year average formula
- excluded coaching / extra curriculum income from calculations
- changed year limits or multiplier
If you believed in the current system - this is what other states have done to trim costs but maintain integrity.
The plan under Corbet included #1, and the salary caps would have forced almost every superintendent into early retirement.
It should be noted that state legislators can join SERS or PSERS and I bet as the junior legislators age and they start to realize what they did to themselves, there will be some pension reforms again, that is better for members.
The 2.5 multiplier legislation was a result of politicians writing themselves into the PSERs system.
ktxhopem3276 t1_ja4rtnt wrote
> Some will use the saved DC funds (403b) wisely, most will blow through it very quickly, and be left w/ a pension that is HALF what their predecessors got.
That’s the lamest point you’ve made. More flexibility comes with risks and benefits. If teachers can’t manage money maybe they aren’t smart enough to be teachers
> Yes, Wolf screwed the teachers pension wise, and he didn’t have to. The state workers also got screwed. Some of my colleagues know this but many have no clue this change occurred, or the finical implications of this long term.
It he didn’t do something it would be kicking the can down the road to insolvency or worse, abolishing pensions all together in a Republican governor got elected. The PESA and wolf made a strategic decision to fix things now in hopes of protecting the system in the long run.
> Corbet attempted to do the same, but he never signed off on pension reform because democrats would have lost their minds. Wolf was a useful idiot for the Republicans.
>They could have done the following:
They changed form 3 to five years in 2017.
> It should be noted that state legislators can join SERS or PSERS and I bet as the junior legislators age and they start to realize what they did to themselves, there will be some pension reforms again, that is better for members. The 2.5 multiplier legislation was a result of politicians writing themselves into the PSERs system.
I doubt it. The 2017 reform is probably not the last of the cuts. The state budget isn’t looking solvent in the future and wolf’s 2017 law was an attempt to avoid a catastrophe down the road. You seem intent on making perfect the enemy of good.
ScienceWasLove t1_ja4vs3p wrote
The DC number you site is projected, and again is made of employee contributions 4.5-5.5% based on, an imaginary 7% return, and a 2-2.5% employer contribution. It is smoke and mirrors.
The majority of the money in that 403b/TSA will be THEIR OWN contributions, not a windfall.
All of which teachers were free to do before the reform w/ a 403b/TSA.
No matter how you frame it, teachers will have a less secure retirement.
The law was signed be Wolf. He could have vetoed, proposed less drastic changes.
ktxhopem3276 t1_ja510rd wrote
The DC number you site is projected, and again is made of employee contributions 4.5-5.5% based on
9.00% (DB: 6.25% + DC: 2.75%) 1.25x with state 2.25% DC
8.25% (DB: 5.25% + DC: 3.00%) 1.00x with state 2.00% DC
> an imaginary 7% return
can you find a 35 year time period that the stock market returned less than that?
> and a 2-2.5% employer contribution. It is smoke and mirrors.
thats all most people get from their employers.
The hybrid design of half pension and half 401k balances the risk of stock market crash or state insolvency.
> The majority of the money in that 403b/TSA will be THEIR OWN contributions, not a windfall.
I never said it wasn't their own money. Before 2011, their own contribution was 6.25%. After 2011, to get the 2.5x you have to put in 9% of your salary. After 2017 2.5% of that goes to the 401k and the 2.25% state contribution mostly makes up for the lower 1.25x multiplier
> All of which teachers were free to do before the reform w/ a 403b/TSA. No matter how you frame it, teachers will have a less secure retirement.
"Less secure" is a clever way to say they still get a lot more money than nearly any other occupation for retirement. Im not disputing 2017 changes were a cut in benefits. Im just saying they were necessary to avoid larger cuts in the future.
> The law was signed be Wolf. He could have vetoed, proposed less drastic changes.
That would have been kicking the can down the road. And if a republican trifecta of assembly senate and governor get elected, pensions will be abolished.
Teachers aren't doing themselves any favor with voters when they cry that they can't retire on a 45K pension with social security and a 401k on top. my opinion is the union stance going forward should be "no more cuts" and if their battle cry is go back to the old days of 2.5x, voters will laugh in their face and support that we abolish pensions all together.
ScienceWasLove t1_ja5hyb6 wrote
What's great is that the teachers aren't complaining. The PFT and PSEA have not told them to complain, and continue shilling for nearly every democratic candidate.
The older teachers (like me) who understand what happened won't be impacted. The younger teachers (as mentioned) are to young to realize.
I wonder why Corbet didn't just abolish the system, as you suggest? Under his governship the contribution rate actually increased to 10.3%, attempting to at least increase funding, before Wolf decimated it.
Here is a link to the 7 member classes and contribution rates. I think the example you are looking at only references 3 of the 7 classes. You don't move through the classes based on the year, you stay in the the class for the year you were hired. Fortunately my rate is locked in at 7.5%.
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I know changes were necessary. I just think the should have made changes to make it similar to police/fireman (on NYC teachers) where you can collect around 50% at 25 years w/ no penalty, instead of 50% at 35 years, starting a second career in your 40's.
I also think the teachers continue to tow water for the democrats when they should, at the very least, be vocal about how the changes under Wolf were not pro-teacher. Yet they praise him like jebus.
ktxhopem3276 t1_ja5w1kp wrote
> What's great is that the teachers aren't complaining. The PFT and PSEA have not told them to complain, and continue shilling for nearly every democratic candidate.
If you think any of the recent Republican candidates would raise teacher pensions you are mistaken. The republicans are only interested in more unregulated charter schools that are bleeding money from schools.
> The older teachers (like me) who understand what happened won't be impacted. The younger teachers (as mentioned) are to young to realize.
Most of them know they are worse off than their seniors and it is depressing. A lot of people are just happy to be in a state with decent compensation. PA spends the 11th most in the country on teacher salaries.
> I wonder why Corbet didn't just abolish the system, as you suggest? Under his governship the contribution rate actually increased to 10.3%, attempting to at least increase funding, before Wolf decimated it.
Because the state budget has been starved to death since then. It’s a a Republican tactic known as “starve the beast” so they can get deeper cuts in the future. The republicans have had control of the state senate for many decades. Their fingerprints are all over the current mess the state budget is in
> Here is a link to the 7 member classes and contribution rates. I think the example you are looking at only references 3 of the 7 classes. You don't move through the classes based on the year, you stay in the the class for the year you were hired. Fortunately my rate is locked in at 7.5%.
I get that they are locked into a class when they are hired but two posts ago you listed the db rates but said they were the dc rates. The new lower db rates of 5.5 and 4.5 come with a 2% dc contribution that doesn’t come from salary.
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> I know changes were necessary. I just think the should have made changes to make it similar to police/fireman (on NYC teachers) where you can collect around 50% at 25 years w/ no penalty, instead of 50% at 35 years, starting a second career in your 40's.
Do new teachers transferring from other careers start at a higher salary than a new grad? They probably should. It’s a little unrealistic to expect the pension system to make up for someone changing careers. maybe they need to scale the multiplier higher for people who start teaching at an older age.
This exposes the issue with defined pension plans because you have to vest. However, you can still vest at 10 years of service or age 67 with 3 years of service. 50 percent at 25 years is a very good pension and police and firefighters get it as hazard pay. I would argue they should get lesser pensions - closer to the current teacher benefits. They are just too expensive for our state - our tax base is elderly and older people can hardly afford to pay property taxes to stay in their houses. Police and firefighter has a special ability to tar and feather anyone that opposes them and teachers m don’t have that level of power in politics
> I also think the teachers continue to tow water for the democrats when they should, at the very least, be vocal about how the changes under Wolf were not pro-teacher. Yet they praise him like jebus.
when teachers criticize democrats for not being generous enough it turns off voters. It’s counter productive in all but the most extreme circumstances
ktxhopem3276 t1_ja5xjqe wrote
Read the article and you will see how dire the funding problem is. If the state doesn’t have a turnaround in its financial fate in the future, even further cuts aren’t out of the question unless republicans support a significant income tax increase
Although the plans’ funded level remained relatively low in 2020 at 58%—below the national average of 70%
But unfunded benefit increases and a longtime pattern of not fully funding annual required contributions meant that the state went from a $20 billion surplus in 2000 to a $60 billion deficit in 2015—one of the largest dips recorded nationwide.
The changes made by Act 120 were important steppingstones to Pennsylvania's pension turnaround. Still, they did not fully address the risk of future unfunded liabilities that could strain the state’s ability to fund pension benefits. As a result, lawmakers overwhelmingly—and on a bipartisan basis—approved Act 5 in 2017. That law made additional improvements to funding policy and put in place a new benefit plan design, called a risk-managed hybrid plan,
[deleted] t1_ja5xh5q wrote
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