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Thu Jan 5, 2017, 08:47 AM

Corman's 2017-18 budget priorites

Jake Corman, the senate majority leader, lays out his plans for the budget.


There are some ideas here, like prison reform, that I agree with and I'm sure Gov Wolf does, too, but the big enchilada is "pension reform". I actually do think that a pension system that allows beneficiaries to withdraw their entire contributions and still receive a pension does need some tweaking because there is no defined benefit system of which I am aware that allows you to be both in and out. I was amazed when I read that Ridge and Rendell among others were able to take a lump sum pension withdrawal and still get around 1,000/mo state pension.

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Reply Corman's 2017-18 budget priorites (Original post)
DeminPennswoods Jan 2017 OP
wcast Jan 2017 #1
DeminPennswoods Jan 2017 #2

Response to DeminPennswoods (Original post)

Sun Jan 8, 2017, 08:41 PM

1. I am a school teacher in PA

While I know that the pension problem was created under Ridge along with state republicans underfunding the plan for years, I wouldn't be against leaving my contributions in the system after retirement. That said, I know you get less of a pension if you take your contributions so I really don't know how much that impacts the pension deficit.

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Response to wcast (Reply #1)

Mon Jan 9, 2017, 07:59 AM

2. Interesting

I have teachers in the family here in PA and I don't think any of them ever withdrew their contributions before collecting a pension. The reason pensions can continue to pay out is that employee/employer contributions are pooled and invested to provide enough returns, along with current employee/er contritubtions, to pay benefits. There is just no way a pension system can survive if everyone opts to withdraw their contribution and still collect a pension. It's nonsensical.

I'm part of the pre-Reagan federal civil service retirement system. Had I withdrawn my contributions, I wouldn't be getting a pension today. I know in private industry pensions, you can take either a lump sum or a pension, but not both.

I know that school boards were allowed to lower their contributions in the 90s because PSERS was actually over 100% fully funded and many of them did. Of course understanding the stock market goes both up and down didn't seem to factor into any decisions made back then.

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