Members, Wolf bring pension law a long way

My PSEA Login



Members, Wolf bring pension law a long way

Voice: July 2017

After four and a half years of debate and nearly 1 million emails and phone calls to lawmakers from PSEA members, the General Assembly finally passed a pension bill last month that DOESN’T include many of the provisions that PSEA has been fighting against.

Gov. Tom Wolf, who’s stood up for PSEA’s pension principles since he took office, was key to keeping the worst pension ideas out of the final bill. He worked with lawmakers to shape the proposal and signed it into law on June 12.

“This pension plan isn’t perfect, but it’s far better than the proposals we’ve seen since 2012,” said PSEA President Jerry Oleksiak. “I’m absolutely convinced that we arrived at this place for two reasons: PSEA members’ incredible advocacy and Gov. Tom Wolf.”

The new pension law has no negative impact on current PSEA members and even makes some positive adjustments for members hired between July 1, 2011 and June 30, 2019. Those members now have option 4 lump-sum withdrawal rights and can benefit from “upside risk sharing,” which allows employee pension contributions to decline when investment returns exceed targets.

Most important of all, the new law protects the integrity of the Public School Employees’ Retirement System and State Employees’ Retirement System, ensuring that the pensions PSEA members have earned and paid for will be there for them when they retire.

Since 2012, lawmakers have actively debated five other pension plans, which would have cut retirement benefits for some or all PSEA members by as much as 70 percent.

“PSEA adopted a set of pension principles so that we could gauge the impact of any pension proposal against what we believe is the right thing to do for our members’ retirement security,” Oleksiak said. “This new law is closer to meeting those principles than any other proposal we’ve seen.”

PSEA members hired after June 30, 2019, will have three new retirement options. The default option, in which members will enroll automatically if they don’t select one, will amount to a 9 to 11 percent reduction in retirement benefits compared to the benefits members hired between July 1, 2011, and June 30, 2019 would receive.

In a message to PSEA members, Wolf explained his thinking on the new law. He emphasized how strongly he has opposed attacks on public sector unions and how he fought to ensure that any pension proposal has no negative impacts on current employees, adequately funds PSERS and SERS, and provides a fair retirement for future school and state employees.

“We needed a balanced approach to these problems to protect your retirements and taxpayers,” Wolf said in his message. “This … will prevent future pension debt while ensuring a secure retirement for the people who educate our children and serve our communities.”

Even though the new pension law will not take effect until July 1, 2019, and will not negatively impact PSEA members hired before then, PSEA has made it clear to members that the Association will keep them updated about the law and make sure that members hired after June 30, 2019, have a full understanding of their pension options.

“We’ve worked hard to keep members updated about what was happening in the state Capitol,” Oleksiak said. “And we’re going to make sure that all members hired after this law takes effect know exactly what their retirement options are so that they can make the best possible choice.”

But, as four and a half years of fighting bad pension plans comes to a close, Oleksiak emphasized just how crucial PSEA members’ advocacy has been to the final outcome.

“Without PSEA members’ speaking out – again, and again, and again – this would have been far worse,” Oleksiak said. “PSEA members stopped bad pension bills from becoming law. I’m incredibly proud of the work our members have done on this, and it just shows what a powerful force we can be when we all stand up and speak out – together.”