Newspaper: When the pension bill comes due, blame the Legislature

Pennsylvania politicians continue to ignore the ticking time bomb of public sector pensions, but the state's newspapers are doing their best to warn taxpayers.

From an editorial in the Reading Eagle:

Pennsylvania's pension system is a great deal, if you're a public school teacher or a state employee. It's not so great if you're a taxpayer.

In the late 1990s, when the average Pennsylvanian's 401(k) was making big gains, so were the state's two pension funds. The Public School Employee Retirement System saw its huge fund - worth $46.7 billion today - gain returns of 16 percent, 12.4 percent and 12.2 percent in 1998, 1999 and 2000, respectively.

As of summer 2001, PSERS and the State Employee Retirement System, which covers state lawmakers and other state employees, were funded at better than 126 percent.

That's when the Legislature and then-Gov. Tom Ridge decided that taxpayers could afford to sweeten the state's retirement pot by 25 percent to 50 percent. Lawmakers, state employees and public school teachers, who had pretty good retirement packages as it was and do contribute to their respective retirement funds, would be guaranteed higher payments in their post-work years.

Workers with defined-contribution 401(k) retirement plans also had reason to smile. Thanks to a booming stock market, their retirement funds were increasing.

Then came the dot-com bust, the Sept. 11, 2001, terror attacks and the stock market drop that followed.

When the pension bill comes due, blame the Legislature (2/28/10)