PPR (3) Real Result

What will the ballyhooed reforms of the Pennsylvania retirement system do for the plans? Based on valuation reports for the Public School Employees’ Retirement System (PSERS) as of June 30, 2016 and the  State Employees’ Retirement System (SERS) as of December 31, 2016 as filtered through US Census data we get these pertinent numbers:

What this reform is likely to mean:

  • Employee contributions of $1.4 billion to the DB part decrease as new participants have their contributions partially (or totally) placed into their own DC accounts.
  • Government contributions of $4.6 billion decrease though actuarial funding gimmickry.
  • Total payouts of $10.2 billion increase with more retirees and better than expected life expectancy while this ‘reform’ which impacts only new participants will not lower any payout amount for decades.
  • Pay-as-you-go status for this plan in 2032 instead of 2034 (unless we get more ‘reforms’ that move the date up again).

8 responses to this post.

  1. Posted by Anonymous on June 13, 2017 at 6:29 pm

    Sounds like a solid plan to oblivion, date TBD! In reality it wouldn’t matter how much you cut the DB plan or for that matter switched to a DC plan b/c politicians/governments make laws not follow them.

    Reply

  2. Posted by Anonymous on June 13, 2017 at 9:02 pm

    Yes John why do you bother anything put into law will not be followed haven’t we learned that already no use looking for reforms that can never be enforced or will never be enforced

    Reply

  3. Posted by Analyst on June 14, 2017 at 6:29 am

    What is the actuarial gimmickry that was done.

    Reply

  4. Posted by dentssdunnigan on June 16, 2017 at 9:30 am

    And there gone ……employers getting ready for the Murphy debacle ,New Jersey lost 14,000 private-sector jobs in May ….http://www.nj.com/politics/index.ssf/2017/06/nj_lost_13000_jobs_in_may.html#incart_river_home

    Reply

    • Posted by Anonymous on June 16, 2017 at 9:59 am

      Blaming on the new guy before he’s in office. Ever think it’s the current Gov’s fault…..

      Reply

      • Posted by Anonymous on June 16, 2017 at 12:33 pm

        It’s NJ “trajectory” that’s evident.

        Even IF we froze ALL of NJ’s ludicrously excessive Public Sector pensions (replacing them with 401K-style Plans with a 3% of pay Taxpayer “match”), and ended all retiree healthcare subsidies ….. thereby putting NJ”s Public Sector workers ON PAR with their Private Sector counterparts, it would take decades to deal with PAST service accruals (unless we ALSO rejected the 50+% of these that were fraudulently “promised” as well).

        NJ is DEAD …. either through massive tax increases or service insolvency.

        Reply

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