Keep the Promise: Protect School Employee Pensions
September 23: State legislators return to Harrisburg this week for the fall Legislative session. PSEA members should watch their email for updates.
Gov. Corbett's 401(k) plan will sink our pension fund
Gov. Tom Corbett's pension proposal will cut current member benefits by 26 percent ($16,166) per year. His proposal also includes a risky 401(k)-type plan that will decrease benefits for new members.
Beware: it will
- Increase Pennsylvania's pension debt,
- Destabilize the entire pension system, and
- Force future cuts to current member benefits.
It's simple math: Two retirement systems are more expensive than one.
The governor is planning to implement a risky 401(k)-type retirement savings plan for future hires. This means there will be two retirement systems: an inferior 401(k) system for future hires and a defined benefit pension plan for current employees. Failed attempts and numerous actuarial studies in other states show that our state can't expect to operate the two retirement systems for the price of one.
Creating an inferior alternative pension system for new employees destabilizes the defined benefit plan and introduces fatal flaws that turn it into a ticking time bomb.
It cuts off funding to the plan, decreases investment earnings for the fund, and increases taxes.
The Corbett 401(k) proposal is more expensive for Pennsylvania taxpayers than the current system.
The Corbett scheme will increase the pension debt. PSERS unfunded liabilities will need to be paid off regardless of what happens to new hires.
Keystone Research Center pension primers
As policymakers, media, school employees, and citizens evaluate Gov. Corbett's pension proposal, the Keystone Research Center released a series of short “pension primers” to explain complex details at the heart of the pension debate. Find the complete set of primers at www.keystoneresearch.org/pensions
Talking about your pension
Find more talking points and background information