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Senate Co-Sponsorship Memoranda
Senate of Pennsylvania
Session of 2013 - 2014
Regular Session
MEMORANDUM
| Posted: | October 3, 2013 02:21 PM |
|---|---|
| From: | Senator Mike Folmer |
| To: | All Senate members |
| Subject: | Restricting Public Pensions for Future Association Employees |
| As a small step toward addressing the many problems of Pennsylvania's public pension systems, I will soon be introducing legislation to remove future employees of the Pennsylvania School Boards Association (PSBA) from being eligible for public pension benefits. Pennsylvania’s public pension systems are drowning in red ink: PSERS (Pennsylvania School Employees’ Retirement System) has unfunded liabilities of over $27 Billion; SERS (State Employees’ Retirement System) has unfunded liabilities over $17 Billion. The combined unfunded liabilities exceed $44 Billion, over $8,000 for each Pennsylvania household. Even if we were to raise taxes $1 Billion a year to try to address these liabilities, it would take 44 years to resolve the Commonwealth’s current public pension problems. A properly designed pension plan has a “healthy” funding ratio of at least 80%. SERS is 65.3% funded and PSERS is 69.1% funded. The funded ratios of the two systems are expected to continue to decline in the coming years, hitting a low of 55.2% for SERS and 59.4% for PSERS. These are prime reasons why Pennsylvania’s bond rating was recently downgraded. Each year these problems are not addressed, SERS and PSERS fall deeper into debt. Payouts currently exceed income by $3 Billion a year. Having current or future employees pay for others’ future pension benefits represents a government-run Ponzi scheme. If we keep ignoring these seas of red ink, they will continue to worsen, threatening both current and future benefits of retired teachers and state workers. By 2018, the state pension debt will rise to $65 billion, a staggering $13,000 owed by each Pennsylvania family. Thank you. |
Introduced as SB1169