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OP-ED: Wolf vetoes generational theft measure
Pennsylvanians can exhale in relief: Gov. Tom Wolf has vetoed a delusional, dangerous public pension bill that would have put the commonwealth's younger generations on the express lane to the Welfare State or out of the state.
Imagine working 35 years as a public school teacher and being asked to retire on $11,000 a year or less. Not enough Wal-Mart greeter jobs exist in the universe to keep such retirees in their homes and off of food stamps.
The average annual benefits for retirees in both plans — PSERS for public school teachers and SERS for state employees — are now below $26,000 and are among the least generous of all large public sector pension plans in the country. Cutting the benefits by 70 percent for future state employees and teachers is not a prescription for prosperity.
Household incomes were advancing little even before the Great Recession, but the now-vetoed Senate Bill 1 would have condemned younger generations of Pennsylvanians — the Post Millennials and Millennials who make up almost 25 percent of Pennsylvania's population — to poverty.
Senate Bill 1's attack on the up-and-coming generations does not stop with the paltry benefits it proposed. The measure would have made new employees pay down the $54 billion pension debt by forcing them to contribute to cash balance accounts and then skimming off a goodly portion of the investment returns to pay down pension debt.
As noted by the Keystone Research Council, the miserly 3 percent return that new employees would receive on their contribution to their cash balance accounts is less than the 4 percent that non-vested employees currently receive on their pension contributions when they separate from public service.
The Public Employee Retirement Commission noted that new employees would be expected to subsidize the future costs of current members.
It is scary that this ideological swill even made it to the governor's desk, and I hope younger Pennsylvanians take notice of what came within a pen stroke of being implemented.
And the 843,000 active and retired Pennsylvanians supported by the state pension plans — that's one in every six households in the state — should not rest easy, either. Senate Bill 1 would not have paid down the pension debt any faster and would have added billions of dollars in new costs.
Pennsylvania has a plan to put its pensions on solid footing. Act 120 of 2010, which I helped craft and guide, is reducing the state's costs by 60 percent — that's $33 billion — and charting predictable, moderate payments for addressing the debt. And, one in every six state workers and teachers is now enrolled under Act 120's pension provisions.
The Keystone Research Council agrees: "Since chronic underfunding is the primary reason Pennsylvania has a $54 billion unfunded pension liability, maintaining the schedule of contributions to public pension plans required under Act 120 of 2010 is the policy most important to solving Pennsylvania's pension problem."
Pennsylvania needs to boost household incomes, not eviscerate them. Fortunately, Gov. Wolf put a stop to the fiscal foolishness.
— State Rep. Dwight Evans represents the 203rd Legislative District of Northwest Philadelphia and is a former, longtime chairman of the House Appropriations Committee.