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JUNE 23, 2010 | Policy Report by COMMONWEALTH FOUNDATION
A Taxpayer's Budget 2010: Responsible Spending for Pennsylvania
A Taxpayer's Budget 2010: Responsible Spending for Pennsylvania identifies opportunities to cut over $4 billion in wasteful state spending in Gov. Rendell's proposed FY 2010-11 budget. The report also offers a series of recommendations for resolving the current revenue shortfall and reducing the size and burden of government on
JUNE 21, 2010 | Commentary by RICHARD DREYFUSS
$27 Billion Pension "Reform": Still Doubling Down on Generational Theft
An Update on HB 2497
On June 16, the PA House passed pension "non-reform" by further deferring the scheduled taxpayers' contributions to the state's largest government pension plans - the Public School Employees Retirement System (PSERS) and State Employees Retirement System (SERS). They also created a new reduced defined benefit plan for new hires. T
JUNE 15, 2010 | Commentary by RICHARD DREYFUSS
Rendell's $52 Billion Pension "Reform"
Doubling down on generational theft
Gov. Rendell and the Democrat-controlled House are trying to redefine pension "reform" by further deferring the scheduled taxpayers' contributions to the state's largest government pension plans - the Public School Employees Retirement System (PSERS) and State Employees Retirement System (SERS). The cost of this reform with intere
Recent Blog Posts
AUGUST 30, 2010
Understanding PSERS' Gains
Pennsylvania's pension fund for school employees, PSERS, reported significant gains in the past year -- a 14% return on investment. This is higher than the national average, and nearly double the 8% expectation that all estimated costs are based on.
But that isn't the whole story:
There is a difference in pension funds between "Market Value" and "Actuarial Value." The Market Value is the current value of investments, which increased 14%, or $6 billion. The Actuarial Value is based on the five-year average of the market value, and will decline this year.
PSERS hasn't posted the full report online yet, but the 2009 Actuarial Valuation indicates the plan was 79% funded. The 2010 funded level will be lower.
Second, 14% is a great return, and will marginally reduce taxpayers' future contributions. Unfortunately, lawmakers decided to put less into the fund than we should have been investing. That money could also have earned 14% return, but instead, policymakers deferred costs to future generations.
posted by NATHAN BENEFIELD | 05:21 PM | 0 comment
AUGUST 10, 2010
Silliest Defense of Government Pension Plans Yet
A letter in the Wilkes-Barre Times Leader attacks the Commonwealth Foundation for supporting moving state government and school districts employees to a defined-contribution retirement plan, like a 401(k). The argument? Basically that Gordon Gekko wants a 401(k), and that CF is shills for Wall Street.
There is a huge logical flaw in this attack-the-messenger approach: Wall Street already benefits from the pension plans. Pennsylvania's pension systems' team of financial advisors invests in stocks, bonds, mutual funds, and even risky hedge funds and derivatives.
The benefits of a defined-contribution plan would be on workers, who would have greater flexibility and own their retirement fund, and taxpayers, whose costs would be affordable and predictable. In contrast, HB 2497, the so-called state pension "reform" bill, would cut worker benefits and delay payments into the funds at a cost of $27 billion over 30 years.
posted by NATHAN BENEFIELD | 09:04 AM | 0 comment
AUGUST 4, 2010
Will Philadelphia Drop DROP?
Virtually everyone knows that Deferred Retirement Option Plans (DROP) are costly - at least those who know what it is - but now the City of Philadelphia has some hard numbers on the cost of their DROP for municipal employees.
DROP allows employees with a certain number of years to "retire" and start collecting their pension, but then continue to work - often in the same position - collecting a salary (sometimes reduced), but not paying into the pension fund.
A new study, commissioned by the city, finds the plan cost $258 million over the past decade, with annual costs ranging from $21 million to $36 million.
Mayor Nutter immediately called for an end to DROP, amid constant criticism of DROP, ending speculation on his political conflict on the issue.
posted by NATHAN BENEFIELD | 08:22 AM | 0 comment
