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Making it worse

February 24, 2013

State Sen. Eugene Yaw in a recent story on public employee pensions says he supports forcing new teachers into a defined contribution, 401(k)-style plan. I commend Se....

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(51)

crkesq

Feb-27-13 10:47 AM

and they also can retire with a pension that is more than the salary they earned as amember of the legislature. The average school employee pension is $24,000 per year. How many people can survive on that amount of money in today's economy?

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crkesq

Feb-27-13 10:45 AM

We need to clear up some misconceptions here. Fact is that putting new employees into a 401(k) plan does NOT solve the problem. It does nothing to solve the underfunding problem. Another fact is that the largest piece of the pie for pension income is investment returns and second are the employee contributions. If no new employees are contributing into the fund because they are in a 401(k), then there will be more money going out to retired employees than is coming in and there will not be enough money to invest and the system will enventually run out of money, so yes, it will affect those who are now retired and those who plan to retire. Public employees who would have more than 10 years to wait until they could retire may have nothing including the thousands of dollars of their own paychecks that they put into the fund. I would like to see Mr. Yaw and his colleagues in the state legislature defend their 3.0% multiplier and the fact they they vest in a shorter period of time

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mikekerstetter

Feb-25-13 12:29 PM

andy33-"you have no idea who I am"

True, I don't. The majority of the posters don't allow their real identity to be known.

andy33-"I know more about public service unions than you ever will"

Perhaps, but I highly doubt it. Especially when you don't even know that the Unions representing SERS and PSERS employees don't negotiate the terms of the pensions the employees they represent receive. How informed can you be?

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andy33

Feb-25-13 11:59 AM

Here you go again Mike..."There are too many myths out their regarding public employees and their unions. Things aren't as rosy as people like Andy make it out to be."

You are so biased...I know more about public service unions than you ever will...you are so funny...you have no idea who I am.....but I know you talk bull.

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mikekerstetter

Feb-25-13 4:20 AM

The employees deserve the compensation they were promised over that 20+ years of service.

The reason I bring up private vs public is because there is a misconception that public employees live high off the hog. The reality is that it isn't true. When compared to others doing similar jobs with similar education and other factors, public employees get paid less than their private industry counterparts even after figuring in the cost of pension and benefits.

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mikekerstetter

Feb-25-13 4:01 AM

Premier-"Mike everything you said here is true but your always talking about the difference between the private and public sector jobs. The private sector must now pay for the public sectors pension [which is right} but the private sector has no such guarantee anywhere. I and lots of other people lost money after 911 and no one bailed us out. This is what gets under alot of peoples skin."

I can understand that. But the anger is misplaced. People ought to be mad at the Government, not their unions and certainly not the employees who have paid into the fund every payday.

The rules for Government are different than rules for private companies. If a company said they were going to put matching funds into your retirement account but didn't because they thought you were making enough money on investments, somebody would go to jail. Plain and simple. The Government got away with it because they are bound by law to pay for the pension it promised in exchange for the employees ser

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Premier

Feb-24-13 6:33 PM

Mike everything you said here is true but your always talking about the difference between the private and public sector jobs.

The private sector must now pay for the public sectors pension [which is right} but the private sector has no such guarantee anywhere.

I and lots of other people lost money after 911 and no one bailed us out. This is what gets under alot of peoples skin.

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mikekerstetter

Feb-24-13 5:55 PM

Enigma, I know what the problem is. And I know the way it is. The way it is, is, that the pensions for current employees must be honored. If that means raising taxes, well then that is what will have to happen. The reality is that the State is not going broke. In fact we have a Balanced Budget requirement. The PA Constitution says the state must pay it's bills and honor it's contracts. The courts have ruled that employee pensions are contracts under the PA Constitution and further that those contracts can't be changed once they are in place fur current employees and retirees. The bill has to be paid, the budget has to be balanced, and if it can't be done within a balanced budget, taxes will need to be raised.

That is reality, or 'the way it is', as you've put it.

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enigma

Feb-24-13 5:38 PM

...the way it is.

This whole thing reminds me of a problem which occured on a previous job. Management had made a commitment to a customer and then come to engineering to tell us what needed to be done. When we told that the what they wanted could not be done, their response was to tell us that it had to be because they had made the commitment. They did not want to hear that it was impossible, the just kept saying,"You have to do it, we already promised it to the customer", like that would change the laws of physics. We jumped through some hoops and came up with a solution that satisfied the customer, but we did not change the laws of physics and deliver what was initially promised. That is what we need to do here. We need to come up with the best case solution that is actually possible.

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enigma

Feb-24-13 5:31 PM

Mike, You spend a lot of time telling me what the problem is and then say you don't know what the problem is. Are you confused? The problem is that the money is not there and you can't just raise taxes to fill the gap. It works in theory, but not in reality. It really doesn't matter who negotiated the mess, they were not negotiating with there own money, so they had no skin in the game. You can't negotiate that way. It doesn't matter whether the pension plan was arrived at by union negotiations or delivered on a spaceship by little green men, it doesn't work and it can't be made to work in its present form. I wish that wasn't the case, but it is and no amount of demanding what you were promised will make it happen. It will only bankrupt the system and then nobody gets anything. There's an old saying,"Better half a loaf than no loaf." You can say it's unfair, you can say it's illegal, you can say whatever you like and you might be right, but what you cannot do is change the w

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LaughIn

Feb-24-13 3:29 PM

Good post David

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mikekerstetter

Feb-24-13 3:01 PM

enigma-"The government does not negotiate in good faith, because it is not their money they are negotiating with."

Enigma, the State hires labor law firms to negotiate their contracts. If you do a history of contracts, you will find several years over the last decade with no raises and increased payments for healthcare. I can guarantee you that they don't just roll over and give the employees everything they want. That includes Mandatory Arbitration (those who, by law, cannot strike) with those bargaining units who have it.

Watching local School Districts, it seems they do the same. There area couple in the area who have been working without a contract for a couple of years, which most likely means they have gotten no raises during that time.

There are too many myths out their regarding public employees and their unions. Things aren't as rosy as people like Andy make it out to be.

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mikekerstetter

Feb-24-13 2:51 PM

David, legislation in 2010 increased new employees contributions and reduced their multiplier, plus increased the percentage the Government has to put into the system to cover what is needed to cover what wasn't put in previously.

The problem now is that Corbett and the School Districts are balking at the increased contribution from their side.

The 'fix' introduced in 2010 goes a long way into fixing the problem, but the money has to be put in and it has to have time to work.

I don't think anyone is opposing changing the system to a 401k for new employees to eliminate the possibility of being underfunded in the future. But that alone will not fix the problem for current retirees and employees already in the system.

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mikekerstetter

Feb-24-13 2:44 PM

enigma-"Chuck,"Pensions were negotiated in good faith by the teachers"

The government does not negotiate in good faith"

Can we start out with the indisputable fact that the pensions are not negotiated by unions for members of either the SERS or PSERS pension systems?

I don't know what everyone doesn't get about that.

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mikekerstetter

Feb-24-13 2:41 PM

andy33-"Well...I NEVER made mention of anything you wrote...now you are reading YOUR opinions into my world.....!!!!"

You've made quite a few comments about teachers, government employees and their unions in various threads.

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mikekerstetter

Feb-24-13 2:37 PM

enigma,

Much like PA's pension problem, the Federal Government's raiding of the SS funds and it's obligation to pay it back is at the root of the problem. The PA problem is that now they have to pay back what they did not put in, and the SS problem is that the Federal Government has to pay back what it borrowed. Both were done in lieu of raising taxes when taxes should have been raised to cover other costs. It was easier for the PA Governments to not pay their share into the pension finds and for the Federal Government to take from the SS funds rather than raise taxes or cut spending.

Neither can be fixed without the taxpayer footing the bill. But it was their bill to begin with, so I don't know what the problem is.

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DavidBross

Feb-24-13 2:36 PM

The legislation that led to the problems with the public school employees retirement fund, also benefits the state legislators. Funny how Yaw didn't mention legislators going to a 401(k). I agree with Enigma, I have often written that if PSERS retirees (of which I am one) don't do something now, it will be done later and the difference will be the difference between doing surgery with a scalpel and a chain saw. So far, I haven't gotten many, if any, fellow retirees to see that.

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LaughIn

Feb-24-13 1:13 PM

The state has some? I don't understand why Mike is so upset again. There are a need for unions and maybe the nonprofessional staff should be the biggest group in the USA. Enigma hit the nail and drove it home.

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enigma

Feb-24-13 1:01 PM

Chuck,"Pensions were negotiated in good faith by the teachers"

The government does not negotiate in good faith, because it is not their money they are negotiating with. The public employee pension problem is truly sad. They were promised something that cannot be delivered and that's wrong. If they are not altered retroactively, they will bankrupt the country and then there will be no pensions for them at all. It is much the same as Social Security. If not altered it will bankrupt the country, but many will not entertain fixing it. I have been paying into it for nearly 40 years, and I hate that my money was stolen, but that is the fact and denying it will just make it worse later on. I'm sorry the teachers were lied to, but the truth is we cannot give them what was promised and promising it to new teachers would be criminal.

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andy33

Feb-24-13 1:01 PM

Mike....please lay down your soul for the unions...that will save the rest of us from the outcome......

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andy33

Feb-24-13 12:59 PM

Mike says..."My problem with your solution is that your opinion is that all public employees are overpaid and underworked. You want the best teachers but want to pay them minimum wage with no benefits. You expect someone to go to college and continue their education to keep up their teaching certificate but equate......."

Well...I NEVER made mention of anything you wrote...now you are reading YOUR opinions into my world.....!!!!

Get a real life!!!!

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mikekerstetter

Feb-24-13 12:43 PM

Something else to think about in your rants denigrating PSERS employees is that it also covers janitors, cafeteria workers, etc, a lot of whom aren't represented by unions, make close to minimum wage and many whom don't have benefits.

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mikekerstetter

Feb-24-13 12:39 PM

LaughIn-"Mike please see who all benefits from a pension through PSERS, do any work for PDE?"

Me-"but it seems that you think that the State Government pays into the PSERS system. While they may for their employees who are in that system"

I've already acknowledged that the State has some employees in the system. but the majority of people in PSERS are local school district employees.

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mikekerstetter

Feb-24-13 12:35 PM

andy33-"Mike...to be clear....I do think States should fund schools in their OWN state...also local tax support...only then will salaries and bennies come in line with reality and comparable with those paying the BILL!!!! This seems to be the only way to solve this issue.....do you have anything better to offer?"

My problem with your solution is that your opinion is that all public employees are overpaid and underworked. You want the best teachers but want to pay them minimum wage with no benefits. You expect someone to go to college and continue their education to keep up their teaching certificate but equate them with the teenager asking if you 'want fries with that' at the local fast food joint. As far as I'm concerned, teachers are worth every penny and more.

But back to Federal money, that money is usually tied to specific programs that they want implemented. It's not supposed to be used to offset daily expenses, but that is exactly what most local School Districts d

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LaughIn

Feb-24-13 12:19 PM

Mike please see who all benefits from a pension through PSERS, do any work for PDE? If so, where does their share come from? Also, hold on Lycoming Co. because along with reassessment usually comes higher school taxes too (for those who own property). What is the solution Andy33?

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