Adding up pension costs
Remember those school tax hikes everybody was hit with recently – the ones attributed to the increased contribution school districts had to make to cover investment losses sustained by the state’s pension system for retired school employees? Well, you ain’t seen nothin’ yet.
According to the Pennsylvania Association of School Retirees, contributions to the pension system could increase 10-fold, “to over $1 billion in 2003-04.”
But, says PASR, don’t blame current retirees, who were left out of the pension bonanza.
The “truth” is, the increase will result from the May 2001 vote by state lawmakers that increased their pensions by 50 percent and also gave future retiring public school employees a 25 percent pension boost.
The resulting financial fallout has drawn the interest of Auditor General Bob Casey, who will conduct a performance audit of the state’s retirement systems. We’re glad to hear that. But we agree with PASR that Casey should also look at the system’s actuarial practices.
As the neglected retirees argue, future beneficiaries have a right to know if the system really will be able to provide for them in retirement. Just as critically, taxpayers have a right to know if they’re going to be slammed for even greater contributions in the future.