Pension Talking Points

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  • School and public employees made their full contributions to the pension funds, but the state and school districts did not. Pennsylvania needs to keep its promise to its public employees, and fund public employee pensions fully.
  • The average PA public employee pension is under $25,000 a year.
  • Public pensions keep retirees out of poverty. A 2012 study shows that moving from a defined-benefit plan like PSERS and SERS to a defined-contribution plan (like a 401K) increases poverty among seniors by 30 percent.
  • Public pensions help sustain local and state economies. For every $1 invested in public pensions by taxpayers, $7.95 is generated in consumer spending, according to the National Institute for Retirement Security (NIRS). Pennsylvania ranks second nationwide in economic activity generated by public pension spending.
  • Some proposals to “fix” the system exacerbate the current funding difficulties. If new contributions into PSERS and SERS end, taxpayers would be responsible for the entire unfunded liability for existing PSERS/SERS members. Under a defined-contribution plan, new teachers, college faculty and state and school employees would have to save substantially more during their careers to achieve the same level of retirement security. (NIRS) 
  • Allow Act 120, the 2010 pension reform bill, to work. Act 120 put the state on a path to healthy pension funding. It passed with bipartisan support and will close the funding gap, with employers and employees sharing the responsibility.
  • Abandoning defined-benefit pension plan in favor of a defined- contribution plan exposes taxpayers to greater expense.
  • 401k-type plans are 46% more expensive than DB plans, not including significant transitional costs. (Pension Rights Center)
  • Every Pennsylvanian deserves secure, stable retirement income. Instead of eliminating defined- benefit pensions for public employees, we should work together to ensure that every working Pennsylvanian can retire with economic security and dignity.