I am amazed at the position taken by Mr. David Kyle in his most recent discourse to this newspaper that in his opinion the underfunded pension liability for state employees and public school employes of $41 billion is not a crisis. I might agree if this liability was one of a private entity which is not dependent at least in part upon public funding. Please correct me if I am in error, but isn't the taxpayer going to be on the hook for some of this funding shortfall at SERS/PSERS?
The underfunded pension issues raised were not created in a day, nor will they be resolved quickly. The fact that the current status of these pension funds has been impacted by 10-plus years of under funding and poor investment returns, while factually and directionally correct, does not tell the full story. The level of benefits provided by the SERS/PSERS plans are generous and have become expensive.
Plan abuse by back loading excessive overtime into the pension calculations for some of these programs inflate even more pension obligations. It seems that the refusal of many organizations to see that the 1980s, with their high rates of return, are long gone and the continued ineffectiveness of both parties to address what ultimately are actuarial issues is a shame, with the taxpayer left holding the bag.
Defined benefit pension schemes have been changing over the past 10-15 years to defined contribution schemes, i.e. 401k plans, in part to simplify the plan administration, lower overall costs, and lessen employer obligations.
As taxpayers we have become an unwilling participant in an increasingly broken system. We are constantly exposed to a "circus-like" atmosphere regarding local and county officials, state representatives, and nationally elected officials who are all pointing the finger at each other. Let us not forget the seemingly endless school board budget squabbles which resulted in continued tax increases.