Message on pension crisis misunderstood
In my role as state representative, I went before the public and the Altoona Area School Board’s committee of the whole on Oct. 7.
I was there to explain the depth and the consequences of the pension underfunding crisis in Pennsylvania.
Apparently, the presentation was way over the head of James Krug, whose recent comments in the Mirror were as inane as they were inaccurate.
I began that meeting by stating that the blame fully lies with elected officials, who through a series of bills in 2001, 2002, 2003, and 2010 have deliberately underfunded the pension benefits earned by state and school employees. These legislative acts had the full support of the PSEA and other public sector unions.
Because Section 17 of Article One of our commonwealth’s constitution (no law can be passed impairing the obligation of contracts) has been interpreted by courts to forbid changes to the pensions of current employees and retirees, those people have nothing to fear with respect to their pensions.
However, there will be consequences to others, including students, in making good on those promises.
My aim is to minimize the damage of those consequences. There are two necessary steps in that regard: One, new employees should receive a defined contribution retirement plan, which is always fully funded, portable and offers options for each employee to exercise for his or her own personal situation.
The second necessary step is to start putting more money into the defined benefit plans currently in place.
Krug’s cry at the meeting to “give Act 120 time to work” is a wail of ignorance and delusion.
In just the first two years after Act 120 became law, the underfunding at SERS increased 80 percent.
It went up because Act 120’s aim and effect have been to repeat the mistake of the past: putting less into the pensions than the actuarial required contribution.
I have to wonder why Krug wants to continue a program of failure and worries more about future employees than the people currently paying dues to his union?
I implore everyone to support these two initiatives, which are necessary to make good on the promises to our public sector employees.
Even more will have to be done down the road and there will be unavoidable budgetary consequences for our school districts in the near-term and the long-term.
But denial and delay will only make those consequences worse and will greatly jeopardize our duty to provide “a thorough and efficient system of public education.”
John D McGinnis