Official: Pension system broken
November 15, 2012
JACKSON TWP — The executive director of the beleaguered Public School Employees’ Retirement System said Monday night the pension system is $26 billion in debt and there’s no easy solution to fix it. Jeffrey Clay spoke to the Seneca Valley School Board Monday night about the ailing and controversial pension plan, which covers hundreds of thousands of state school employees from bus drivers all the way up to superintendents. The school board for several years has been extremely critical of the pension system because, according to member Eric DiTullio, the state continues to foist unfunded mandates on school districts, which in turn drive up property taxes and deficits. Clay during the presentation said the PSERS pension system works if properly funded, but added it hasn’t been properly funded since 2002. The executive director cited both short-term and long-term issues that have negatively impacted the system. Among the short-term issues were two “historic” downturns in markets over the last 10 years. The market is a significant contributor because 70 percent of the pension systems’ funding came from investments in the last 10 years, while 18 percent of funding came from members of the plan and 12 percent came from employer contributions. Clay also placed blame on long-term factors like $6 billion in unfunded mandates passed from the state government down to the school boards.