To the editor:
The Commonwealth Foundation’s most recent editorial about the state’s pension crisis was an interesting take on a problem that ultra right wing organizations like the Foundation helped to create.
The Pennsylvania state pension program was actuarially sound when it was designed. Originally, each teacher in the program was to contribute a percentage of his/her salary, while the school district and the state were to match the funds put in by the teacher. For many years, the program prospered and was solvent.
A decade or so ago, right wing lobbyists convinced legislators that the program would be able to sustain itself even if the school districts and the state did not contribute the percentages the actuaries had calculated. Laws were passed that permitted the school districts and the state to pay significantly less than that which was required to keep the program solvent. There were years when the schools and state contributed nearly nothing. The teachers continued to pay the same originally designated percentage of their salaries throughout that time.
There were two significant downturns in the economy during the time of low contributions by the districts and the state. The most recent one occurred about six years ago. The lower return on investments coupled with the irresponsibility of the schools and the state resulted in the current pension crisis.
The really interesting thing about all this is that the same right wing organizations, like the Commonwealth Foundation, that had pushed and lobbied for the districts’ and state’s lack of contributions now want to revamp the entire program.
Of course, the Foundation claims that no current retiree will be hurt by changing the contribution concept to something that will bring in much less money than before. But the Foundation fails to mention that a significant amount of what each current retiree receives comes from money being collected from teachers, districts and the state now.
It does not take an actuary to realize that, if the Commonwealth Foundation has its way, at some point in the near future, the money a retiree currently depends on will have to change during the time he receives his pension.