Submitted by greenhousecrtv t3_11c6n94 in Pennsylvania
ktxhopem3276 t1_ja3i42e wrote
Reply to comment by ScienceWasLove in Pennsylvania Makes Progress Toward Public Employee Pension Sustainability by greenhousecrtv
Does pa require a masters degree after five years of teaching like ny does? it seems like it drivers up the cost of being a teacher and burns people out
I used the 2011 law numbers. the 2017 law makes it around $45k for 35 years of service at age 62. Full retirement age of 67 would get about $55k. And you get a 401k ontop of that with 2% a year match from the state. That’s still not “half” of what they used to get and far from a shitty pension.
> That would equate to a replacement of pre-retirement income of about 55 percent to 57 percent. Coupled with Social Security, that would get our worker to about 90 percent.
https://www.pennlive.com/politics/2017/06/pa_pension_reform_bill_what_yo.html
https://www.psers.pa.gov/Leaving-Employment/Pages/Retiring.aspx
ScienceWasLove t1_ja3mpg1 wrote
PA requires a MS in 5 years in order to get a Level 2 cert, otherwise your Level 1 cert expires and you can’t teach.
The new pension plan revisions equate to about 2/3rds of what a teacher would get before the revisions - about half of their salary - after 35 years.
Similar to what cops/fireman get - except they only have to work 20-25 years.
The changes will cause new teachers to leave the profession at higher rates.
If you had to teach for 20-25 years, you could arguably transition to another career while in your 40’s.
Teaching until you are in your 50’s makes that career change much harder.
Wolf fucked the teachers hard w/ the pension change.
In NY you only need to teach 25 years to collect a “full pension” with no penalty.
ktxhopem3276 t1_ja3p5nm wrote
> PA requires a MS in 5 years in order to get a Level 2 cert, otherwise your Level 1 cert expires and you can’t teach.
That seems like a huge burden on young teachers. I imagine having to work and get a masters would lead to more burnout. Most states don’t have this requirement.
> The new pension plan revisions equate to about 2/3rds of what a teacher would get before the revisions - about half of their salary - after 35 years.
Don’t forget the $500k in 401k benefits build up over those 35 years
Even without the 401k it’s still about 75% because 45k is 25% less than 60k while 60k is 33% more than 45k.
> Similar to what cops/fireman get - except they only have to work 20-25 years.
Police and firemen are more politically savvy then teachers and do a good job at convincing voters they take on great risk of bodily harm and deserve the pension to be compensated
> The changes will cause new teachers to leave the profession at higher rates.If you had to teach for 20-25 years, you could arguably transition to another career while in your 40’s.Teaching until you are in your 50’s makes that career change much harder.
I feel like teacher burnout is not directly connected to pensions because the pension is earned so far in the future. Why would teachers leave the profession if they earn more pension the longer they stay? That’s basically why politicians are afraid to convert teachers to an entirely 100% 401k system because it would give no incentive to stay.
> Wolf fucked the teachers hard w/ the pension change.
Why do you blame it on him when it was passed by the legislature? If it wasn’t for wolf, the Republican legislature was calling to entirely abolish pensions. If you want more teacher pay and benefits it will take a democrat state senate to get it.
>. In NY you only need to teach 25 years to collect a “full pension” with no penalty.
I don’t think that’s correct. Ny has raised its age just like PA has.
https://www.nysut.org/members/retirees/teachers-retirement-system
Teaching jobs in ny are competitive and many graduates move out of state to find work. My sister had to move to Virginia for much less pay and benefits bc jobs in ny were nearly impossible to get without political connections. Rural areas in pa struggle but suburban and even urban districts don’t have trouble getting new teachers at least in Pittsburgh
ScienceWasLove t1_ja3sg87 wrote
Wolf signed it into law. All he had to do was veto the very anti-teaching legislation authored by the republican general assembly, that would have been the end - and a win for the people who put him in office.
What’s worse is the PSEA nearly blew Wolf throughout his whole term.
I should have said NYC school system is 25 years.
In link you provided none of the non-NYC tiers had a 35 year threshold, like PA.
The assumptions in the PennLive article from PSEA do not match the more realistic assumptions provided by PSERs. Again, it equates to about 1/2 of what I will get. It is also an annuity, so it doesn’t literally have the same value as cash when you die.
Once you teach for 2-10 years, you start to fully understand the ramifications of the pension system. So, I am 22 years in, and at 35 years I will collect a decent pension. I have known this since about year 2 of teaching.
Teachers w/ a BS in Math, Bio, Chem, Physics will realize in year 2-10 that they can make more money in the private sector, that combined w/ the lack luster pension - after staying around for 35 years - will provide an incentive for career change. It’s happening now because of COVID related issues in public ed.
ktxhopem3276 t1_ja3vrew wrote
>. Wolf signed it into law. All he had to do was veto the very anti-teaching legislation.
the state would struggle to pass a budget if he vetoed the law. Split government control requires compromise.
> authored by the republican general assembly, that would have been the end - and a win for the people who put him in office.
People put their republicans into office also and high government pensions are a big reason republicans keep getting elected in this state
>What’s worse is the PSEA nearly blew Wolf throughout his whole term.
Maybe they knew this was a good compromise
> I should have said NYC school system is 25 years.
This is probably due to supply and demand and a stronger union. If you like it so much go there and pay super high cost of living
> In link you provided none of the non-NYC tiers had a 35 year threshold, like PA.
That’s comparing apples and oranges because the tier 6 minimum age is 63 which would be 40 years for someone who started at 23.
> The assumptions in the PennLive article from PSEA do not match the more realistic assumptions provided by PSERs. Again, it equates to about 1/2 of what I will get. It is also an annuity, so it doesn’t literally have the same value as cash when you die.
It you start teaching at 27 and each full retirement age of 67 you would earn 40 years * 1.25 multiplier times max salary of 90k would be a pension of 45k AND a large 401k of around $500k. You aren’t getting any sympathy from voters with that kind of retirement package. I think you are more stuck in the fact that older teachers got a better deal but that’s sort of irrelevant.
> Teachers w/ a BS in Math, Bio, Chem, Physics will realize in year 2-10 that they can make more money in the private sector,
Most can’t. There isn’t much demand for those basic bachelors degrees unless you went to a top school or go on to get a phd. Software development is really the only career that you can earn more than teachers. Average starting salary for a Carnegie Mellon graduate in chemistry makes 70k and doesn’t get a pension.
I get that older teachers got a sweetheart deal but even new teachers are still getting competitive pay versus most private sector jobs. I think the 2017 law is a good compromise that should be the state in a more stable financial ground which is the main point of the article. I think teachers might get more sympathy if they focus on how draconian the republicans would be and avoid a circle firing squad on democrats that have generally way more supportive overall to education spending.
ScienceWasLove t1_ja42ehh wrote
Ok. Lets focus on how the republicans, PSEA, and wolf all circled around the teachers in the firing squad and fucked over new teachers. My multiplier will be 2.5%; new teachers will get 1.25% (or 1%). They are getting fucked and will get half the pension for the same time. Retirement multipliers per PSERs: https://imgur.com/vMikKQg
Example per PSERS: https://imgur.com/eKaITG9
You mention a 401k, but that is money is a mandatory 4-5%ish of the teachers salary, it is effectively a decrease in present salary. In most districts this was already in place with optional 403b programs.
Don't worry. The vast majority of PSEA members and democrats are wholly unaware of how Wolf fucked over the teachers. They used to be aware of the change from a 2.0 multiplier and 40 years to 2.5 and 30, and who made it happen, but it has all been lost to history.
ktxhopem3276 t1_ja48o0z wrote
At least here in pittsburgh they raised the starting salary a lot to make up for reduced pension benefits. They raised the starting salary by 20% from $40k to $48k in 2019. It’s basically a trade off because they weren’t attracting enough new teachers with the model of low starting salary in exchange for better future pensions.
The point is the pension used to be more generous and that was unsustainable in an actuarial basis with the plateauing state population . Since the increase in pension benefits to 2.5% in 2001, the state has gone from a well funded pension program to a deeply indebted system. The 2.5% level was never sustainable and will be a burden on the state for decades and caused voters to hate teachers. Maybe if the state didn’t switch to 2.5% in 2001 we could afford a higher rate like 1.5 or 2 for new teachers but the bottom line is older teachers fucked over newer teachers by draining the system of its reserves.
You’re in the middle that has benefits closer to the pre 2001 numbers. You shouldn’t compare the current benefits to the unreasonable benefits given in 2001. If you were hired after 2011 you are buying into the 2.5% with your salary deductions and your rate otherwise would be 2% which is more in line with the sustainable rates we had before 2001. New teachers in the 2017 and 2011 base plans contribute the same amount 6.25% of salary to the defined benefit pension but the 2017 class gets a multiplier of 1.25 in exchange for a 2.25% state contribution to the 401k. Over 35 years of teaching at an average salary of $70k and an a average growth rate of 7% in a 401k that would be worth $350k. Add in the 2.75% employee contribution and the balance would be around $850k that is their money to do what they want with instead of a fixed pension they can leave it as an inheritance for their children or whatever they want. So they are getting half the pension as you for the same 9% contribution but the 401k is a huge offset to the lost pension and comes with more flexibility.
It’s my opinion that if teachers can’t accept the compromise wolf made, they are being unrealistic and have their heads in the sand over the state budget. Wolf is a moderate and he won the election because voters trusted him to be a prudent manager of the states finances. They can cry all they want about how older teachers got better benefits but today is a different day and we have to make decisions that are good for the states finances in the long run. I think teachers should advocate for removing the masters degree requirement but they won’t do that because it funnels money to the higher education professors who have their own pension to worry about.
http://sers.pa.gov/about-legislation.html
https://www.psers.pa.gov/Active-Members/NewToPSERS/Pages/Class-Election.aspx
ScienceWasLove t1_ja4m3or wrote
The 401k is the slight of hand part that attracts the bugs to the bug zapper. It sure does look attractive. Unless you are retired for 10+ years. A 7% market assumption was part of what created this problem.
Let us not forget that the politicians created this funding problem by decreasing state/employer contributions because of higher market returns. When the market tanked, and the employer/state contribution did not return to previous levels. They literally kicked the can down the road for a decade+.
At the very least, they could have returned the multiplier to 2.0, or left the multiplier at 2.0 w/ a target of 25 years.
I see Pittsburg SD is offering a $5,000 signing bonus w/ around 170+ vacancies.
ktxhopem3276 t1_ja4qipq wrote
>The 401k is the slight of hand part that attracts the bugs to the bug zapper. It sure does look attractive. Unless you are retired for 10+ years.
40 years of service still gets a pension+401k that is a lot better than what you would get in the private sector. New teachers who work 40 years just like most taxpayers, will have $45k annual pension and an $850k retirement account which has an actuarial value of $35k a year. That’s a 90k total retirement package in addition to the 30k in ssocial security they earn. When teachers cry poverty, no one believes them anymore because they have cried “wolf” too many times. Maybe the low starting salary is a conspiracy to make it look like teachers are poorly paid but most voters are on to that trick. Could you stop and think for a minute about why even democrats don’t support such high pensions?
> A 7% market assumption was part of what created this problem.
No it wasn’t.
> Let us not forget that the politicians created this funding problem by decreasing state/employer contributions because of higher market returns. When the market tanked, and the employer/state contribution did not return to previous levels. They literally kicked the can down the road for a decade+.
I don’t dispute that.
> At the very least, they could have returned the multiplier to 2.0, or left the multiplier at 2.0 w/ a target of 25 years.
25 years at 2.0x would be a bad idea. That’s probably the same statistical value as the 2001 30 year 2.5 multipliers.
> I see Pittsburg SD is offering a $5,000 signing bonus w/ around 170+ vacancies.
Is that teachers or support staff? They furloughed teachers last year because the district has shrinking enrollment. They should Increase the starting salary because nobody trusts the pension system is sustainable.
ktxhopem3276 t1_ja4agpt wrote
As annoying as I find your “wolf fucked over teachers” narrative, this overall was a good conversation for me to learn more about the system. I’m not in support of any more cuts and I think the 2% rate would have been a good middle ground but the state budget is in bad shape and I think the new model with half pension and half 401k and higher starting salaries is the right mix to save the system. The bigger issue in the future is going to be the state funding lawsuit that is going to really throw a monkey wrench into the school funding formulas.
ScienceWasLove t1_ja4mld8 wrote
There is absolutely no model for “higher starting salaries”. Salaries are determined district by district.
Perhaps Pittsburg did raise staring salaries because of the pension change, I have no idea if that is true. However a higher stating salary (if true) and an 11 year salary schedule is attractive. But the Pittsburg district also has $5,000 sign on bonuses right now….
ktxhopem3276 t1_ja4tv2a wrote
they should raise starting salaries and let teachers have their money immediately instead of locking it up for years. Teachers don’t even pay the maximum social security benefit cap. The more people that rely on social security the better support it will get. When teachers and mailmen and other government employees carve themselves out with special pensions, that creates a division in the working class that makes it harder to mount a unified fight against special interests and big business
ScienceWasLove t1_ja4vzjr wrote
Some principals and most superintendents and some other central office admin hit the max benefit. If they were capped, there would be money to go around.
ktxhopem3276 t1_ja4w9v4 wrote
Not much more. It’s the shape of a pyramid with only a few at the top.
ScienceWasLove t1_ja4p787 wrote
I have been a paying union member for 22 years. Part of the AFT, PFT, PSEA, and NEA. Plus a former Teamster.
The PSEA spent many many PACE contributions promoting Gov Wolf before he was elected and while he was elected. In the PSEA magazine he was getting full spread articles about how great he has been for public education.
The union is very pro democratic politicians for very understandable reasons.
The pension reform, which he vetoed, will absolutely impact the quality of retired life for all new teachers moving forward. Some will use the saved DC funds (403b) wisely, most will blow through it very quickly, and be left w/ a pension that is HALF what their predecessors got.
Yes, Wolf screwed the teachers pension wise, and he didn’t have to. The state workers also got screwed. Some of my colleagues know this but many have no clue this change occurred, or the finical implications of this long term.
Corbet attempted to do the same, but he never signed off on pension reform because democrats would have lost their minds. Wolf was a useful idiot for the Republicans.
They could have done the following:
- set a CAP on maximum salary (like social security)
- changed the 3 average formula to a 5 year average formula
- excluded coaching / extra curriculum income from calculations
- changed year limits or multiplier
If you believed in the current system - this is what other states have done to trim costs but maintain integrity.
The plan under Corbet included #1, and the salary caps would have forced almost every superintendent into early retirement.
It should be noted that state legislators can join SERS or PSERS and I bet as the junior legislators age and they start to realize what they did to themselves, there will be some pension reforms again, that is better for members.
The 2.5 multiplier legislation was a result of politicians writing themselves into the PSERs system.
ktxhopem3276 t1_ja4rtnt wrote
> Some will use the saved DC funds (403b) wisely, most will blow through it very quickly, and be left w/ a pension that is HALF what their predecessors got.
That’s the lamest point you’ve made. More flexibility comes with risks and benefits. If teachers can’t manage money maybe they aren’t smart enough to be teachers
> Yes, Wolf screwed the teachers pension wise, and he didn’t have to. The state workers also got screwed. Some of my colleagues know this but many have no clue this change occurred, or the finical implications of this long term.
It he didn’t do something it would be kicking the can down the road to insolvency or worse, abolishing pensions all together in a Republican governor got elected. The PESA and wolf made a strategic decision to fix things now in hopes of protecting the system in the long run.
> Corbet attempted to do the same, but he never signed off on pension reform because democrats would have lost their minds. Wolf was a useful idiot for the Republicans.
>They could have done the following:
They changed form 3 to five years in 2017.
> It should be noted that state legislators can join SERS or PSERS and I bet as the junior legislators age and they start to realize what they did to themselves, there will be some pension reforms again, that is better for members. The 2.5 multiplier legislation was a result of politicians writing themselves into the PSERs system.
I doubt it. The 2017 reform is probably not the last of the cuts. The state budget isn’t looking solvent in the future and wolf’s 2017 law was an attempt to avoid a catastrophe down the road. You seem intent on making perfect the enemy of good.
ScienceWasLove t1_ja4vs3p wrote
The DC number you site is projected, and again is made of employee contributions 4.5-5.5% based on, an imaginary 7% return, and a 2-2.5% employer contribution. It is smoke and mirrors.
The majority of the money in that 403b/TSA will be THEIR OWN contributions, not a windfall.
All of which teachers were free to do before the reform w/ a 403b/TSA.
No matter how you frame it, teachers will have a less secure retirement.
The law was signed be Wolf. He could have vetoed, proposed less drastic changes.
ktxhopem3276 t1_ja510rd wrote
The DC number you site is projected, and again is made of employee contributions 4.5-5.5% based on
9.00% (DB: 6.25% + DC: 2.75%) 1.25x with state 2.25% DC
8.25% (DB: 5.25% + DC: 3.00%) 1.00x with state 2.00% DC
> an imaginary 7% return
can you find a 35 year time period that the stock market returned less than that?
> and a 2-2.5% employer contribution. It is smoke and mirrors.
thats all most people get from their employers.
The hybrid design of half pension and half 401k balances the risk of stock market crash or state insolvency.
> The majority of the money in that 403b/TSA will be THEIR OWN contributions, not a windfall.
I never said it wasn't their own money. Before 2011, their own contribution was 6.25%. After 2011, to get the 2.5x you have to put in 9% of your salary. After 2017 2.5% of that goes to the 401k and the 2.25% state contribution mostly makes up for the lower 1.25x multiplier
> All of which teachers were free to do before the reform w/ a 403b/TSA. No matter how you frame it, teachers will have a less secure retirement.
"Less secure" is a clever way to say they still get a lot more money than nearly any other occupation for retirement. Im not disputing 2017 changes were a cut in benefits. Im just saying they were necessary to avoid larger cuts in the future.
> The law was signed be Wolf. He could have vetoed, proposed less drastic changes.
That would have been kicking the can down the road. And if a republican trifecta of assembly senate and governor get elected, pensions will be abolished.
Teachers aren't doing themselves any favor with voters when they cry that they can't retire on a 45K pension with social security and a 401k on top. my opinion is the union stance going forward should be "no more cuts" and if their battle cry is go back to the old days of 2.5x, voters will laugh in their face and support that we abolish pensions all together.
ScienceWasLove t1_ja5hyb6 wrote
What's great is that the teachers aren't complaining. The PFT and PSEA have not told them to complain, and continue shilling for nearly every democratic candidate.
The older teachers (like me) who understand what happened won't be impacted. The younger teachers (as mentioned) are to young to realize.
I wonder why Corbet didn't just abolish the system, as you suggest? Under his governship the contribution rate actually increased to 10.3%, attempting to at least increase funding, before Wolf decimated it.
Here is a link to the 7 member classes and contribution rates. I think the example you are looking at only references 3 of the 7 classes. You don't move through the classes based on the year, you stay in the the class for the year you were hired. Fortunately my rate is locked in at 7.5%.
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I know changes were necessary. I just think the should have made changes to make it similar to police/fireman (on NYC teachers) where you can collect around 50% at 25 years w/ no penalty, instead of 50% at 35 years, starting a second career in your 40's.
I also think the teachers continue to tow water for the democrats when they should, at the very least, be vocal about how the changes under Wolf were not pro-teacher. Yet they praise him like jebus.
ktxhopem3276 t1_ja5w1kp wrote
> What's great is that the teachers aren't complaining. The PFT and PSEA have not told them to complain, and continue shilling for nearly every democratic candidate.
If you think any of the recent Republican candidates would raise teacher pensions you are mistaken. The republicans are only interested in more unregulated charter schools that are bleeding money from schools.
> The older teachers (like me) who understand what happened won't be impacted. The younger teachers (as mentioned) are to young to realize.
Most of them know they are worse off than their seniors and it is depressing. A lot of people are just happy to be in a state with decent compensation. PA spends the 11th most in the country on teacher salaries.
> I wonder why Corbet didn't just abolish the system, as you suggest? Under his governship the contribution rate actually increased to 10.3%, attempting to at least increase funding, before Wolf decimated it.
Because the state budget has been starved to death since then. It’s a a Republican tactic known as “starve the beast” so they can get deeper cuts in the future. The republicans have had control of the state senate for many decades. Their fingerprints are all over the current mess the state budget is in
> Here is a link to the 7 member classes and contribution rates. I think the example you are looking at only references 3 of the 7 classes. You don't move through the classes based on the year, you stay in the the class for the year you were hired. Fortunately my rate is locked in at 7.5%.
I get that they are locked into a class when they are hired but two posts ago you listed the db rates but said they were the dc rates. The new lower db rates of 5.5 and 4.5 come with a 2% dc contribution that doesn’t come from salary.
=============
> I know changes were necessary. I just think the should have made changes to make it similar to police/fireman (on NYC teachers) where you can collect around 50% at 25 years w/ no penalty, instead of 50% at 35 years, starting a second career in your 40's.
Do new teachers transferring from other careers start at a higher salary than a new grad? They probably should. It’s a little unrealistic to expect the pension system to make up for someone changing careers. maybe they need to scale the multiplier higher for people who start teaching at an older age.
This exposes the issue with defined pension plans because you have to vest. However, you can still vest at 10 years of service or age 67 with 3 years of service. 50 percent at 25 years is a very good pension and police and firefighters get it as hazard pay. I would argue they should get lesser pensions - closer to the current teacher benefits. They are just too expensive for our state - our tax base is elderly and older people can hardly afford to pay property taxes to stay in their houses. Police and firefighter has a special ability to tar and feather anyone that opposes them and teachers m don’t have that level of power in politics
> I also think the teachers continue to tow water for the democrats when they should, at the very least, be vocal about how the changes under Wolf were not pro-teacher. Yet they praise him like jebus.
when teachers criticize democrats for not being generous enough it turns off voters. It’s counter productive in all but the most extreme circumstances
ktxhopem3276 t1_ja5xjqe wrote
Read the article and you will see how dire the funding problem is. If the state doesn’t have a turnaround in its financial fate in the future, even further cuts aren’t out of the question unless republicans support a significant income tax increase
Although the plans’ funded level remained relatively low in 2020 at 58%—below the national average of 70%
But unfunded benefit increases and a longtime pattern of not fully funding annual required contributions meant that the state went from a $20 billion surplus in 2000 to a $60 billion deficit in 2015—one of the largest dips recorded nationwide.
The changes made by Act 120 were important steppingstones to Pennsylvania's pension turnaround. Still, they did not fully address the risk of future unfunded liabilities that could strain the state’s ability to fund pension benefits. As a result, lawmakers overwhelmingly—and on a bipartisan basis—approved Act 5 in 2017. That law made additional improvements to funding policy and put in place a new benefit plan design, called a risk-managed hybrid plan,
[deleted] t1_ja5xh5q wrote
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