Monday, March 7, 2011

Excerpt from my column: Unions must face pension crisis

It’s going to take a monumental effort for Pennsylvania to weather the storm that is brewing in the Pennsylvania Public School Employees Retirement System (PSERS).

I don’t think unions have to be busted to get it done, but union members do have to start paying more attention in class. And I would also appreciate it if every time some one brings up an idea that concerns unions that we don’t have to hear the Norma Rae, sweatshop, 20-hour workday song. We know the verses, and I don’t think any rational-thinking person would disagree with the lyrics. Unions were critical in the development of the industrialization of America. There were plenty of sweatshops in existence in this country, and there probably still are some, and reform was sorely needed.

Union workers make up less than 12 percent of all workers in this country, down from a high of about 36 percent. And out of that 12 percent, more than 35 percent are public employees.

There-in lies the rub.

My best guess is union bosses saw the writing on the chalkboard and decided their best chance for survival would be to go after public sector jobs like a fourth grader going after the last peanut butter cookie in the cafeteria at lunch time. They did, and we’re all being put into financial detention because of it; not because of the unions themselves, but because of their ability to hold hostage school boards across the state, and their ability to buy politicians like so many extra cups of ice cream.

I don’t blame the teachers. Who wouldn’t want a four, five or six percent raise every year, and after 25 years retire with at least 80 percent of your salary being paid to you for the rest of your life?

In the public sector it works a little differently, especially when it comes to school districts here in Pennsylvania. Teachers’ unions apparently have the ability to hypnotize school board members into giving them raises every year, convincing them that they should only have to pay a small portion of their health care with some magical swinging watch that tells them all they have to do is go to the taxpayers for the money to fund all of the above, including a plump pension that will more than take care of them for the rest of their lives.

In most private sector industries, pensions, as a way of providing retirement benefits for employees, have all but gone the way of the tetherball pole on the playground.

The math — and trust me when I tell you English was by far my favorite subject — even for me, it just doesn’t add up.

A report by the Manhattan Institute for Policy and Research issued last year projected the Pennsylvania pension fund to have a gaping $43.2 million hole. PSERS stated at the time that the hole was closer to $9 million. Either way, it’s a mighty big hole.

“The employer (school district’s) contribution rate (to the teacher pension fund) has been set at 8.22 percent for the 2010-2011 school year. This represents a 72 percent increase over the 2009-10 rate of 4.78 percent. The latest projections from PSERS forecast the employer rate to exceed 20 percent in 2013 and spike to almost 34 percent by the year 2015. Although the rate will begin to decrease in 2016, it will continue to exceed 20 percent until the year 2032.

This 19-year “plateau” of employer contribution rates greater than 20 percent would exceed a level of expenses for taxpayers, school districts and the commonwealth unparalleled in the 92-year history of PSERS.”

All because of stock market losses. This comes straight from the Pennsylvania School Boards Association as an explanation for how they’re going to fill that $43.2 million gap.

By the way, did the government bail out your 401k after the stock market crashed? No? I didn’t think so.

Check out how other states are dealing with the same issue,


Betsy McBr said...

The sentiment in the final sentence concerns me. It is:

" By the way, did the government bail out your 401k after the stock market crashed? No? I didn’t think so. "

I shudder to think that one's misfortune permits wishing misfortune on others. There are countries that have no child labor laws (or at least do not enforce them); in the name of fair competition, should the U.S. get rid of its child labor laws? There are countries that have no fire and safety laws in manufacturing facilities; should the U.S. get rid of its safety requirements? There are countries who have no environmental regulations, should the U.S. eliminate its regulations? My point is simply because the U.S. government has told its banks and financial institutions that it will bail them out while turning a blind eye and a deaf ear to us, individuals who may have also lost money on our investments, is no reason to giddily wish that all individuals suffer the same loss. It may certainly be reason to no longer tolerate legislation that punts responsibility into the future; it may be reason to arrive at some equation that offers rewards for long term employment in combination with incentives for taking personal responsibility for one's future financial needs. It is not a productive use of time nor is it a productive use of the medium of newspapers or radio or internet to emotionalize and contrast one individual's loss to another's lack of loss. It may be the perfect time to review the last sixty years and see what we have discarded that may be should be brought back and see what we have cultured that may be should be eliminated or modified.

Anonymous said...

The State Employees Retirement system has earned 11.9% in 2010. They have always had a good return on their investments. I don't know where you got your figures from but mine can be checked on the Pa website. Perhaps the fault is in our government not in the people of the Commonwealth. said...


The teachers union is part of the problem, BUT the fat pay raises that administration gets is beyond ridiculous.

According to the Methacton Education Association, over the last 3 years the Methacton administrative salaries have increased 21.91%.

In a recession? said...


Why is the Methacton School District spending tax dollars on legal opinions for one of their administrators?

One of their principals, Jason Sorgini, is running for the position of Lower Providence Supervisor.

Our group has made the point that this is a blatant conflict.

What does the district do?

They use taxpayer dollars and hire a lawyer to research whether Sorgini's hobby is legal!

They have posted a link to this on their homepage. The actual opinion can be seen HERE.

This is an outright misuse of taxpayer dollars.

How much did this opinion cost the taxpayers of Methacton?

How much time did Methacton staff take out of their busy day to order this?

Also, the Methacton website is not free!

If are serious legal questions about Sorgini's hobbies, Sorgini should pay to have them answered!

I don't understand what Superintendent Quinn or the school board were thinking.

If Mr. Sorgini has any integrity left, he should go down to the courthouse today and remove himself from this race, or pay back the taxpayers or Methacton.

Been there said...

TIME, TIME,TIME,TIME: A very interesting word. How much time did the Paralegal steal from her company to post these blogs?

This Paralegal forgot what the word INTEGRITY means.

Check out their web-site as asked...see how many responses are posted.

I count three, three of their own.

Anonymous said...

Maybe there would be more money for teachers if state and local governments and school districts didn't have to purchase public notices at an 80% profit margin for the newspapers.