Is Your Pension Safe?

3/27/2009 3:11:00 PM

During a recent State House Appropriations Committee meeting, representatives from the Public Schoo…

During a recent State House Appropriations Committee meeting, representatives from the Public School Employees Retirement Systems (PSERS) reported that the fund lost $28 billion in 2008.  However, current retirees will not see a change in their monthly payments.  Pennsylvania State Government guarantees retired teachers their current pension checks, regardless of the fund’s gain or loss in any particular year.  School districts currently put 4.76 percent of their budgeted payroll into the teachers fund, however, to make up the losses that have occurred as a result of poor economic conditions, that amount is expected to increase to 28 percent by 2012.

Public employee pension losses are being experienced by state and local governments across the country. Many states, including Pennsylvania, are considering legislation that would freeze current state-funded pension plans and replace it with 401(k) plans for future hires.