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ktxhopem3276 t1_ja510rd wrote

Reply to comment by ScienceWasLove in Pennsylvania Makes Progress Toward Public Employee Pension Sustainability by greenhousecrtv

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.

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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.

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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

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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,

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