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The truth about teacher pensions

TIM SURKOVICH

Altoona

In the past five years, especially around election time, I’ve continually heard private citizens, politicians, and school board members blaming teachers for tax increases that help pay for teacher pensions. Many of the accusations include: “They don’t deserve the amounts they are receiving.” “It doesn’t compare to the private sector.” “We the taxpayers are paying for their outlandish pensions.”

And, “They are causing our state to go broke!”

These are only a few of the statements I have heard. Every time I hear people say these things, I just want to scream!

They make these ridiculous statements without knowing the facts.

They don’t do their homework.

They are quick to lay blame and even quicker to attack.

So yes, there is a pension crisis. There I said it! However, it has nothing to do with the teachers.

They are not to blame. If you want to place blame, do your homework. This is exactly what I have done before emphatically stating, “It is NOT the teacher’s fault!”

Before I start to explain why the teacher pension system is in crisis, I want to make known a few seemingly unknown facts. Each teacher hired in the state of Pennsylvania is required to have 7.5% of their paycheck deducted towards their retirement. They have no choice, it happens. So their pension is not free as many taxpayers have been led to believe. Also, let’s put to rest the frequently heard argument “Taxpayers pay the teachers, so the taxpayer is paying for their pension!” Let’s not forget teachers do work for their paycheck, and they work really hard. I know, they get summers off, but that’s an argument I’ll save for another time, maybe this summer!

Before we get into why we have a pension crisis, it is important to have a little history lesson. The pension system was started in 1917. The promise (contract) was that the employee would contribute a percentage of their paycheck, then the state and the local district would each meet half of what the employee contributed. This is similar to, but not exactly the same as, in the private sector where an employee contributes to a 401K and then the employer matches it up to a certain percentage. The state teacher’s retirement system worked flawlessly until the late 1990s and was funded more than enough to meet its obligations. It was then that (Republican) Ridge administration decided to start making changes. If you do the homework the administration felt the pension fund was over-funded and in turn decided to foolishly re-appropriate the pension fund. In 2001 the administration enacted Act 9. This law gave a 25% raise to current employees in the future and retroactively to all other employees. This part of the law you hear more about because it looks like it blames the teachers, but it was the lawmakers that made the decision, not the teachers. The law also required teachers to contribute more to cover the costs. The part you hear less about is the Act also gave our legislators a whopping 50-percent raise in their pensions. Ever wonder why we don’t hear much about that?

Ask your legislators!

Furthermore under the Ridge administration, between 1995 and 1999 the economy was booming, the stock market was creating big returns on investments, so the administration decided to make even more changes to the pension system. Notice I said the state officials were making the changes, not the teachers. They sold these changes as a way to save tax payers money. They cut the required contribution rate to the pension system of the state and the school districts significantly. In some cases 0% was being contributed. Then the terror attacks occurred in September 2001 and sent the stock market tumbling. All of a sudden, the pension plan was in trouble. Once again, I hasten to point out, not because of the teachers, but because of mismanagement of pension funds by our government. Still, the blame continues to be upon the teachers and their lavish pensions.

To show that I am not blaming one political party, the Rendell administration (Democratic), exacerbated the problem by making the choice to artificially reduce the employer contribution rate. Then the recession hit and the pension crisis became even worse. Once again, mismanagement of our money by the government, not our teachers.

In 2010, Rendell’s last year in office, Act 120 was put into law. It is simply stated a long term payment plan to rebuild the pension fund. The Act also reduced the pensions of those teachers hired after January 1, 2011. Things began to improve, but whether the plan is sustainable, is truly up for debate. After the Rendell administration the republicans and Corbett administration did absolutely nothing to try to reform the system.

Now the Wolf administration is struggling with the problem. A great many proposals have been brought to the table but none have yet passed. In a nutshell, the proposals being floated would break the promise (contract) made to teachers back in 1917, all because of mismanagement of funds by the government, not the teachers. So now I’ve done your homework for you. You can look it up if you choose but you’ll find these are the facts. It’s all available online from reliable sources. Simply stated the legislators got a bigger pension, they mismanaged taxpayer’s money, and lowered pensions for newer teachers. They broke the promise set back in 1917 that worked all the way up until the late 1990’s. In the future, before you jump to blaming the teachers for higher taxes to fix the pension crisis, check your facts and take it from a former teacher, always do your homework before you speak out, it’s wise to be informed!

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