For more than 10 years, the state and public schools
have failed to contribute the actuarially required
contribution (ARC).
This, coupled with enhanced pension benefits awarded by Act 9 and the worst recession
since the Great Depression, has created a $53 billion
unfunded liability.
Many members of the state legislature want to change our pension system from a
defined benefit pension plan to a defined contribution plan
(401k).
You have a defined benefit pension, the BEST kind of
pension you can have, because you are guaranteed
a set monthly check.
Your retirement income is determined by how much you contribute and how well your
monies are invested.
A defined contribution pension is a 401k. If you had a 401k in the economic recession we have just experienced, your
retirement savings would have been reduced by 40%.
If the pension systems change to a 401k for newly hired
employees, as many legislators propose, then those newly hired would not be contributing to the
public pension funds, which would cause the funds
eventually to run out of money.
The Pennsylvania Public School Retirement Act became law in July
1917. For 96 years, PSERS has provided reliable, safe pension benefits for all public school employees including
classroom aides, custodial staff, maintenance workers, bus drivers and
attendants, secretaries, administrators, and teachers.