Pension Reform to Protect my Kids
I chose teaching because I enjoy interacting with students and helping them learn. My science classes show students that certain actions yield predictable results. With this in mind, I am particularly concerned about Pennsylvania’s current retirement system for state employees, which includes public school teachers.
Our pension system is underwater by more than $50 billion and, without change, will sink billions deeper. While this is bad news for educators, it’s downright frightening for parents and catastrophic for our Commonwealth.
My wife and I have five wonderful daughters. We’ve raised them to be responsible and self-sufficient. Only a hypocrite would ask them to deprive their children – my grandchildren – in order to pay for my retirement.
The truth is, pensions were originally offered with good intent: to retain quality state employees when higher pay was available in the private sector. Yet, according to 2014 data from the Bureau of Labor Statistics, the average salary of Pennsylvania state employees is higher than those of private sector employees. The original justification for defined pensions is now moot.
The pension crisis is not another political soapbox issue. I know what it’s like to be faced with the unexpected. In 2008 when the economic downturn hit, I was working as a patent attorney and had my own pension plan. The high cost of this pension compelled me to terminate my own pension – I just couldn’t afford it. At the same time, a teaching opportunity arose that allowed me to continue providing for my family’s future.
The vast majority of private companies have realized the dangers of defined benefit pension plans and have switched to defined contribution plans, such as a 401(k). Unlike pensions, employees legally own the money in a 401(k) plan. Investments move with the employee, can be accessed before retirement, can compensate for inflation, can be left to one’s children, and exist independently of any employer’s fiscal status.
We must fix our broken pension system. The future retirement of state employees should not be dictated by politicians, and the faulty formula will continue to produce abysmal results. Passing the costs of today’s broken system to our children is morally unacceptable.
Pension reform is essential to the Commonwealth’s economic vitality. We must amend the system to keep our promises to retirees while securing the future of our state, our communities, and our families.
James R. Williams
New Wilmington, PA