Not so recent rulings have created a situation in PA whereby the teachers have continued to contribute towards their own retirement but the state has not. Now, the fund is approaching a point where taxes at the local level need to be raised to fulfill the retirement obligations that should have been met by the local school districts and the state. News reports are being written concerning this impending "tax crisis" which has led to more nasty letters to the editors about teachers and how little we work and how rich we are and how much we get in retirement that the taxpayers pay, etc. I have no control over this. Please stop blaming me.
Are you sure about that? This is the information that I received from our district regarding the situation.
PSERS (
http://www.psers.state.pa.us/) is a government-mandated, defined benefits pension plan for PA school employees.
It was established in 1917 and today has more than 547,000 members. PSERS is funded through three sources: Employer contributions, employee contributions, and investment earnings. Over a 10-year period, from 2000-2009, investment earnings totaled 59%, member contributions totaled 26%, and employer contributions were at 15%.
The problem:
· Downed investment markets.
· An increase in the multiplier The multiplier is a figure that is set by legislation and is used to determine basic retirement benefits. As a result of Act 9, the multiplier increased from 2% to 2.5%, which ultimately increase the dollar amount an employee is eligible to receive upon retirement.
· Reduced vesting requirements Effective July 1, 2001, the number of years of services to become fully vested was decreased from 10 years to 5 years.
· Cost of Living Adjustment (COLA) Act 38 provided a COLA for retirees.
· A change in the earning assumptions.
The increases that our district is facing over the next 5 years are staggering so I can understand the concern of tax payers.
For the record, I don't blame teachers. Nor do I think they aren't entitled to their pensions.
