Pension crisis about to explode for Pa. school districts

By ERIC BOEHM, PA Independent, in Daily Local News, 12/07/13

Pa. school districts will face the highest pension costs in their history during the 2014-15 school year, but it will only get worse after that.

School districts across Pennsylvania are getting news that’s unpleasant yet not unexpected.

The Public School Employees Retirement System, or PSERS, last week began sending notices to school districts that their pension costs will climb to 21.4 percent of payroll in the 2014-15 school year.

Even though that total could change a bit before it becomes official at an end-of-year meeting of the PSERS board, it gives a pretty good indication of what school districts are facing.

For historical context, the 21.4 percent figure is the highest rate since at least the 1950s — and it’s quite a jump from the 16.9 percent districts paid this year.

The actual cost will vary greatly from district to district depending on the size of payroll, but statewide the PSERS pension obligation for next year will ring in around $1.4 billion — with roughly half that cost covered by school districts and the rest left to the state. Another $537 million will be needed to fund the State Employees Retirement System, or SERS, next year.

State Rep. Glen Grell, R-Cumberland, believes it’s time for the General Assembly to do something about Pennsylvania’s mounting pension costs. He said this week that it should be the next major priority of the state government, now that a $2.4 billion transportation infrastructure bill was signed into law.

“They have never been that high, yet the trajectory is still going up,” said Grell, referring to the school district contribution rates. “If we don’t act soon, the rate will certainly continue its rise until it exceeds 31 or 32 percent.”

Without changes, districts will be forced to raise property taxes, cut programs and lay off staff, he said. …

read more at Daily Local News