After publishing our first story on school pensions last week, some readers felt we had blamed teachers for rising pensions costs and property taxes.
In fact, we made a chart that showed teachers and administrative staff have consistently paid into the pension system. It’s the state that has been less predictable. A decade ago, the state drastically cut how much it contributed. In 2010, the state changed course and began contributing substantially more each year.
The first Facebook comment on our story was from someone who said they had been a teacher for more than than 37 years, described the amount of extra work that comes with the job.
“I had worked many hours preparing my room and lessons,” she wrote. “They were not in my ‘hourly’ rate. Grading papers and doing work at home.”
She added: “I loved teaching because of the children. I feel that I deserve my pension.”
One commenter came to the defense of the teacher, writing, in part, “You deserve your pension because it was part of the compensation your employer offered to pay you in the future in exchange for your work at that time.”
On our website, one commenter wrote, “So when you read this story and then conclude that it’s the teachers’ fault, and their pay should be cut, and their pensions gutted. Remember it wasn’t them whose fiscal irresponsibility created this situation.”
How the pension system became underfunded is fairly complex, but here are a few key dates:
Back when the pension system was doing well, Gov. Tom Ridge and the state Legislature passed Act 9 of 2001, which improved pension benefits for school employees. Because employees had been contributing at a higher rate than the state, and the pension system had extra money, the bill said the employees should receive more money.
The Legislature then passed bills in subsequent years to limit how much the state could contribute to pensions. In some years, pension funds were cut during state budget negotiations.
The lack of state funding has been made worse because the state’s investments haven’t met their assumed rate of return. The 2008-09 recession and tepid returns from the stock market over the past year have compounded the problem. The vast majority of the pension system’s money is supposed to come from investment returns. When its investments don’t do well, the system becomes underfunded. While the state’s contributions and investment returns have fluctuated, money coming from school employees has not.
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