The pension problem

“What will you do to fix the teachers pension?”

That’s one question I was asked since announcing my candidacy. The unfortunate truth is that any pension reform needs to be solved in Harrisburg.

The problem essentially boils down to the high employer contribution rate. The board for the Public School Employees’ Retirement System (PSERS) just approved an increased employer contribution rate of 34.94% for the 2021-22 school year; up from the current rate of 34.51%.

While it is a statewide problem, it hits especially close to home when looking at the impact it has on the school district’s budget.

Contributions to the pension plan from the Exeter Township School District were $10,659,000 for the year ending June 30, 2020 according to the 2019-20 audit report by Maillie LLP. That accounted for approximately 13.5% of the school year’s budget.

Considering the employer contribution rate was just 5.64% ten years ago, you can imagine the impact the increases have had on school district budgets this past decade. Unfortunately, the reduction of rates from 1997 to 2011 are partially to blame for the problems we’re seeing today.

I don’t fault the teachers and staff. They didn’t cause the mess that we’re seeing with PSERS and they actively contribute to their plans which can range anywhere from 5.25% to 10.3% of their payroll depending on when they began paying into the system.

As much as I’d love to solve the problem, the issue ultimately needs to be tackled by our state representatives.

For more information on PSERS contribution rates, visit https://www.psers.pa.gov/FPP/Publications/General/Pages/Employer-Contribution-Rates.aspx.

Jason Mell is running for a 4-year term on the Exeter Township School Board. He is a Planning Commissioner for Exeter Township and the former owner of The Exeter Informant. To read more about Jason, visit jasonmell.com.