Nothing 'generous' about pensions

IN A RECENT column, John Baer calls Pennsylvania's pensions for teachers, nurses and other school and state employees generous but does not provide any evidence. The facts tell a different story.

Compared to similar private workers, Pennsylvania public employees actually make less in total wages plus benefits. Public-sector benefits are higher than private but wages in the public sector are lower by a larger amount.

Pennsylvania public employee pensions are also modest compared to those of public employees in other states. Out of the 100 biggest public sector pension plans, Pennsylvania's plans for state and school employees rank 77th and 89th for generosity. One reason is that Pennsylvania public employees pay for more of their own pensions than employees in most other states - 7 percent of every paycheck. A second reason is that Pennsylvania's public pensions provide no protection against inflation, unlike Social Security, and more than two thirds of the other Top 100 pension plans. If inflation is 3 percent, Pennsylvania public employees who retire at 62 and live to 85 see the buying power of their pension shrink by half.

Pennsylvania ranks near the top not for pension generosity but for failing to make its annual contributions to public pensions. Only New Jersey has put less of the money it should have into pensions. Pennsylvania's public employees should not be blamed - or lose the middle-class pensions that compensate for a lifetime of low salaries - because governors and politicians of both parties repeatedly diverted to corporate tax cuts and to other priorities the money that should have gone into pensions.

Stephen Herzenberg

Keystone Research Center

Harrisburg