The Pennsylvania Legislature needs to do what any successful business would do: conduct a thorough cost/benefit analysis of State Employees Retirement System (SERS) and the Public School Employees Retirement System (PSERS) from the perspective of Pennsylvania's taxpayers.
To date, the focus of the Legislature has been entirely on the costs of the pension systems or, more accurately, the fear of what those costs could be to taxpayers in the future.
There has been limited mention of the benefits these systems provide for all Pennsylvania citizens and the consequences to our economy and the welfare of all Pennsylvanians if the retirement systems for public employees would be eliminated.
It is important to understand that the average annual pension amount that retired public school employees receives is roughly $24,000 and retired state employees receive on average $24,500, hardly the exorbitant sums often reported in the media.
It is also important to understand what we do with our pensions. Very simply, we spend our monthly allotments to pay living expenses, just as those who are working use their paychecks to pay theirs. Certainly, we receive our pensions, but in reality they flow through us and into the economy, thereby benefiting all businesses in Pennsylvania and their employees. Annually, nearly $8 billion is flowing through us into Pennsylvania's economy, which is six to seven times the amount that taxpayers are contributing to maintain these systems.
Another factor thus far ignored in the debate over public employee pension plans concerns the systems' investments. Does anyone know how much the public employee retirement systems invest in businesses that employ substantial numbers of commonwealth citizens? Businesses need capital to innovate, expand, and create more jobs. The public employee retirement systems currently invest a substantial portion of their more than $75 billion in Pennsylvania businesses. Could they invest more and create additional jobs in our state? We believe they can.
The House of Representatives has before it a resolution (HR 649) that would direct the unbiased, bipartisan Joint State Government Commission to conduct a thorough economic impact study of both statewide public employee retirement systems, PSERS and SERS. The study would cost the state no additional funds to complete. More importantly, the study would provide taxpayers and their Harrisburg representatives with the facts they need to consider before making any further changes to the retirement systems.
There is a reason the Legislature has established and maintained these retirement systems for the past 95 years. It has nothing to do with greed or the power of public employee organizations. The truth is that these systems benefit all Pennsylvanians more than they cost its taxpayers. They are a vital part of Pennsylvania's economy. It remains to be seen whether the Legislature is really interested in doing what is best for Pennsylvania's taxpayers or simply continuing to bash public employees and the benefits they receive.
Passage of HR 649 would do much to restore confidence in the current Legislature, if they are concerned about the economy and the welfare of all commonwealth citizens.
-- Dr. Stephen M. Vak is president of the Pennsylvania Association of School Re tirees, a voluntary mem bership organization consisting of nearly 50,000 retired teachers, administra tors and school support per sonnel.