TEACHERS: Attack on pension system is immoral
Governor Corbett recently unveiled his 2013 budget proposal. Much discussion will take place over the next several months. One of the key pieces of his plan is to revamp the pension system for hundreds of thousands of workers across the state. It is important that as these discussions continue, everyone understands a bit about how the problem was created, and what the proposed solutions would really mean.
The pension system was created as a shared responsibility between the state of Pennsylvania, the school districts and the employees. From 2001 to 2010, school districts and the state together paid almost nothing into the system. The Legislature hoped that investment returns alone would cover their share of the cost. In 2000-01, the districts and state paid nothing into the system, and in 2001-02, their combined payments equaled just 0.18 percent of payroll.
During this same period of time, public school employees paid 7.5 percent of their salary into the pension system. This is not an optional payment. It is deducted from every paycheck, every month, every year.
The myth that public school employees receive a “free” pension at the end of their career is ludicrous. A public school employee who earns $40,000 per year pays $3,000 right off the top before ever receiving their paycheck. These pensions are delayed compensation — earned and paid for now, and collected later. In fact, over the past decade, the employees have paid in more than double the amount that the state and districts have paid.
The increasing cost of the pension system is not because the pension system is costing more. It is because of the debt incurred by the state when they chose not to make their share of contributions.
Now when the debt they deferred for so long has come due, their response is to change the rules, and reduce or eliminate benefits for retirees, and members of the system who have dutifully been paying their share for 10, 20 or 30 years.
Changing the pension system that current and future retirees have paid into all of their careers because a decade of legislators wrote IOUs to the system is not just unfair, it is immoral.
Indiana County Coordinated Council of Teachers
n EDITOR’S NOTE: Members of the Council of Teachers include the following education association presidents, who have endorsed the letter: Michael Tshudy, Indiana Area; Becky Stiffler, Blairsville- Saltsburg; Lisa Adams, Homer-Center; Patricia S. Sexton, United; Jon Krecota, ICTC; Kristy Hopper, Marion Center Area; Diane Fenton, Purchase Line; Anthony Delfonso, Penns Manor; and Kim Rode, IU 28.