So what are the real numbers. This political jumbo-jumbo claims the 800,000 state and public teachers are in a $40 Billion hole....that's $50,000/employee. If just 27 are "severely distressed", how much of the $40 billion do these 27 include? I am guessing that these 27 make up much more than half of the problem. The issue then would be to hold these 27 responsible for their fiscal incompetence, and take those dollars and put them into a 401k or 403b and allow those employees who make up the 27 deal independently with their money. The "redistribution" of failure should not be assumed by the majority of responsible municipalities. If they can balance a budget, then they should be supported rather than penalized.

I remain confused, in times like these, why the state "mandates" retirement funding it cannot afford. This is a benefit, as is profit sharing and matching 401k that small businesses at challenged to maintain for their employees. In some cases, under times of stress, these benefits must be reduced, o completely removed. Why doesn't the state act accordingly, explaining that it cannot continue to dump $200 million into funding it cannot afford. Where is the responsibility?

Hogwash, All government pensions programs and the system has morphed into an abuse of the taxpayers trust and good faith. It has been ingeniously designed to redistribute the tax payers’ wealth to that of a very few government workers and leaders. Many within this system have colluded for their own rewards while negotiating a hard fought “WINK-WINK” CBA for themselves, jobbers and their crony’s. All, and I mean "ALL" Federal, State and Municipal worker pensions need to be converted to 401K plans just like the average American tax payer whereas the tax payer contributes a small % match while the employee funds the bulk of their own retirement. If this were done 25 years ago, when the government changed laws and alike to allow Corporations to terminate defined benefit plans and their Wall Street crony's to get all the new juicy 401k money and charge expenses against it and mismanage, maybe these same government leaders would have kept a better eye on Wall Street corruption’s of these and many types of investments which have done nothing in that same period. Stop with the buffoonery and step back from the tax payer’s free money trough! And please do not play the card saying government workers are not compensated as high as private workers…that lie and priming of people really gets under my crawl….
Our Elected officials could change this rule within weeks if they had spines and cared about the middleclass. The reason they do not is because to many are jobbers!

Pensions are antiquated and are being done away with in the private sector.
To typical pensions for teacher's (My wife is one) is based on a formula. Final average salary x a multiplier x Number of years of service. No once does it take into account how much money is in the pension fund thay are drawing against. NOT ONCE! Pensions should be frozen and replaced with 401K/403B plans with the schools providing a match.

Just my opinion.

I like how this turd says "Don't take my pension money and use it to shore up the teachers plan"..... but he has no problem taking my money, and your money, and all the taxpayers money to shore up all the plans.

Remember... Teachers, police and fireman are special people. They should not have to worry about any of the everyday problems that the taxpaying vermin do. Just shut up and pay more to insure these special people can retire at 40 (cops and firemen) or 55 (teachers). Oh, and don't forget to let the cops and firemen PAD THEIR PENSION with tons of overtime in their last year on the job.... they're special... they deserve to do that.

Crestor-Januvia, you hit another one of my big issues. That is Government leaders, who look the other way so their peers can pad-up overtime in the last few years before retirement, to reap the everlasting and greater rewards in pension payment payouts. Why you ask do they do such a thing? Because their time will come to do the same thing!
In my opinion, the 6 greatest deceptions the average tax payer is too busy to understand and does not know how brutally taxing they are to themselves be as follows.
1st) Government worker Defined Pension programs and healthcare benefits they do not have to contribute to or do so very minimally as compared to the average tax payer.
2nd) Government cronyism and jobberism abusing tax payer dollars. Our government is run by lawyers and corporate lobbyist and most definitely not by the people for the people.
3rd) Teacher, Police and Firefighters are very well paid for the work they perform and the risk they take. Just look at the statistics…much lower paid jobs in logging, garbage and other work have a much higher fatality rate than fire and police. And teachers get paid 75-80K a year on average for 8 month work year.

CONT:
4th) School tax has become an abomination of abuse. Yes, teachers do deserve to be fairly paid. However, the collective bargaining agreements (CBA) have created vehicles of manipulation to extract wealth from the middle class without providing greater value to teaching our children.
5th) Our currency is not worth the paper it is printed on. When and how the realization and full impact of this deception will come to fruition is not known, but it is coming…
6) People tend to vote the party line before what’s best for a greater America. The media manipulates facts and minds because they are big business with self-reward in their hearts.
Lastly, I exclude all government military soldiers from any of the above noted cynicism. For they and their families are due everything and anything they need, to provide a quality of life, if after being called to serve in war for our country they return injured or harmed in any way.

What a baloney argument by David M. Sanko. Municipalities have bills to pay. A Republican General Assembly can pass a law stating that municipalities do not have to pay billls, bills such as wages, utilities, Social Security, pensions, or anything else. Municipalities could then enjoy a holiday the way they have with pension contributions not having to pay any of their bills.

Here's the problem. It takes people to run a government. Roads don't repair themselves, communities don't police themselves, students don't teach themselves. To argue we can't afford to do any of those things is fraudulent.

Can't afford to pay wages, benefits, utility bills, pensions, road improvements? Sounds like you can't run a municipality. Trying running one for free.

How about a holiday not paying for MacAdam, snow removal, criminal background checks, because they are all too expensive. The only thing you can afford is your outrageous salary and benefits because without you we can't plow roads, educate children and keep our community safe.

How about this? How about we eliminate the overhead and pay the people who actually work.. How about that big guy?

Patrick, your suggestion of inequities in real estate taxes just highlights cronyism in the system. These inequities occur when our municipal leaders, after a hard fought negotiation WINK-WINK, bow down to their crony’s in a real estate tax reassessment process. You hear them often site “the cost to fight these legal battles outweighs the lost revenue from the reassessment’. Let me put it to the tax payer in terms they may better understand. My “”buddies”” firm represents the company seeking reassessment and he’s a real good guy so “WINK-WINK” we need to take care of him and the corporation and firm he is being paid by for someday I too may be paid legal fees by this same law firm. So let’s just take the tax hit and spread the loss across the little home owners who refuses to fight back therefor we can continue paying our employees with lots of perks so they vote for us and we get perks back. Lastly, I am for the complete elimination of all taxes, Federal, State, County, Municipality, Income and Corporate etc. and replacing it with a Progressive Consumption Tax with a tiered rebates system crediting back monies to family who’s total income is $250,000 or less a year. ( for example 0-$50,000 gets a $5,000 rebate, $50,000 to $100,000 gets a $3,000 rebate, $100,000 to $200,000 gets a $2,000 rebate and $200,000 to $250,000 get a $1,000 rebate). We need to remove lobbying money from the political equation and a Consumption Tax is a good step forward.

PSERS pension crisis. . . just the facts:

the current short fall in the teacher pension was caused by 4 events. these are 2 recessions (90's tech bubble and the housing bubble), governor ridge and ACT 1.

when governor ridge took office he passed a law giving a pension holiday to the state and local school districts. this holiday essentially made the contributions the state made to the pension zero and made the contributions school districts made less than 1%. this went on for years and saved the tax payer a lot of money.

the tech bubble broke with obvious losses to everyone's retirement accounts.

ACT 1 passed stating local school districts can't raise taxes over 1.7% of last year's budget without a vote from the public. right now all school districts are in trouble. they aren't getting the "make up" money from the state. corbett is telling school districts to do more with less. over 14,000 teachers have been laid off in the state of PA over the past 3 years, but the state has taken in extra tax revenue the past 2 years. i believe it is somewhere over $700 million.

finally. . . housing bubble pops with obvious losses to retirement accounts again.

teachers pay over 7% of their salary into the pension system. PSERS isn't a traditional "employee only contributes" plan. teachers never were given a holiday (nor should they have been given one).

Thank you, TBP, for explaining WHY we are in this crisis. I would respect Mr. Sanko if he had done that in his article. Despite the economic problems it is causing, it seems that many people who will/have drawn from the system, paid into it while local school boards opted NOT to meet their obligation. They are now paying the price and have caused an unfair burden on many tax payers. However, the people who have been paying into the system are now being blamed.
I am also very curious. Had all state employees been on a 401K type program as opposed to a pensions system, what would PA's economy look like now? I find it very ironic that the companies who got us into the real mess are now preaching that they will save us. I believe it was taxpayers dollars that bailed the banks out, right? But now we should trust them?
Finally, can someone more 'in the know' answer this for me: If I have a 401K with company X and my consultant is John Doe, does John Doe make money off of my account (commission or similar)?

TBP, stop being silly!....why don't you try your math out for us in a fashion that demonstrates reality. Question: If I started teaching in Springfield Township H.S. in 1975 and plan to retire this year at 58 years old what is my full (pension and benefits) tax burden to the tax payer? I plan to live to I am 88 years old….Now how much did I contribute to this burden over the previous 35 years with my employee contribution rate….Fill in the blanks for us. Let assume an average 5% compounded return. I love learning...
Year Average Salary % Employee Contribution $ Contribution

TBP, I've done my economic model already for this scenario. The delta of what this teacher has contributed over 35 years of service, in this scenario, and what this same teacher extracts in retirement is staggering; over $2,000,000 more using the same 5% compounding return. I want to get one thing straight, teachers deserve to be compensated fairly and play a vital role in our society, however their and other municipality CBA’s have become one of the most abusive and destructive root causes for our economic burdens. This is a fact and undeniable. I was just trying to enlighten you to this very disturbing determination. I was hoping you would come to this same conclusion, but unfortunately it seems you cannot. Look, I understand, if I was a teacher I would not want any of my cookies taken away…they are so, so, so tasty and loaded with all types of chips and candy sweets…..? does TBP stand for "To Be Principle"...LOL

your math has a lot of assumptions. you seem to be stating all teachers across the entire state are making your high average salary. you also are stating that all teachers work the max in terms of years of service and then all live 30+ years post retirement. if so, that's being a bit dishonest to make a point.

regarding the total amount of $$. many people who work in similar professional careers, and have 401k's, amass similar amounts of wealth over the lifetime of their earnings. that is if i use your same formula and say these workers contribute 5%-10% of their salary, get matched 5%-10% of their salary and earn 5%-10% interest over the lifetime of their retirement nest egg. let us not forget that these same folks may also get stock options and bonuses that aren't calculated into the 401k equation.

public and private plans have pros and cons. a big pro of a 401K is that all the money you put in is yours and you can take the entire nest egg out all at once (not advised because of tax reasons). a person with a pension can not. they get monthly checks like S.S.

non of the above really matters. the issue isn't what teachers have or what a person from the pharma industry has, but how politicians have purposely broken the pension system so as to do away with public education in our state. i can not afford private school for all my children and rely on public school for their education. for all our sakes, i hope we can put our differences aside soon.

So.... can someone answer this question for me:

Finally, can someone more 'in the know' answer this for me: If I have a 401K with company X and my consultant is John Doe, does John Doe make money off of my account (commission or similar)?

TBP, See we do agree! Our political leaders have abused the tax payer’s trust and teachers should go to a 401K plan. Teaching is more a calling to public service….and should not be the capitalistic endeavor it has morphed into. As I would have expected, your understanding of 401K is a huge stretch from reality. As for stock options, yes they are nice but they are dilutive to real shareholder value who have bought shares on the open market in whatever investment vehicle they use.
DJ2. 401k’s are a huge ruse. Employers typically match a small percentage of the employee’s own contribution using their company stock which is dilutive to real shareholder value and cost the company very little in real money. You are limited to what funds you can buy. These funds typically hold shares in your company stock also “wink-wink” and yes, there are expenses each fund has that pay for management and brokerage fees. Again, 401k were created as an collusive venture between the corporations who got to terminate defined pensions, wall-street where the employees 401K money got funneled too that now allows some greedy fat-cat to gamble with and our politicians who don’t have to play by the same rules they set-up that created 401K’s. In addition, unlike normal investments 401k are very restrictive in when and how an employee can sell out of them. So unlike normal investments that you can set sell order levels on when shares in your 401k start to tumble…you just get to watch.

Rhode Island is engaging in comprehensive, decisive pension reform.

Everyone, and I mean everyone, is taking a hit, or the state will have to disband all core services just to service the state's massive pension obligations.

There must be some way in which state officials can enact a hybrid-transition from public liability into ublic-private funding streams.

Gov. Christie of New Jersey requested that the teahers' unions support a 1% increase in their contributions. Because they rebuffed, Christie had to lay off teachers. Walker's buget reforms have saved millions of dollars for cities and school districts while preventing massive layoffs and tax increases.

Pennsylvania has a similiar demographic to Wisconsin. Perhaps Corbett should initiate similar budget reforms.