Staff Blog
Pew: Eventually, we will all be screwed
Pew's Philadelphia Research Initiative has just released a report on the cost of city employee benefits (pension and health care). It's not pretty, particularly when it comes to pensions. Money quote from the press release:
Philadelphia’s city pension fund now has less than half the money it needs to make good on its obligation to past and current city workers. The fund has not been this severely underfunded since 1996, and there is little prospect that the picture will brighten appreciably in the next few years.
Basically, the city has been short-shrifting the pension fund for several years now — pushing the obligation down the road and hoping it becomes someone else's problem. And one of our leadership's solutions to the current budget crisis is to ... short-shrift the pension fund.
If you're relatively young and plan on living in Philly for a while, you can probably start looking forward to a day when you're paying a lot of taxes for services rendered a long time ago.
Last week, a spokesman for D.C. 47, the city's white collar workers union, criticized the timing of the report (before it came out — he had been briefed on some of the contents during the fact-checking process), saying that it coincided too closely with the expiration of the public sector unions' contracts.
This seems crazy to me. Isn't this the exact right time for a report like this, when the greatest number of people are talking/thinking/debating about public employee compensation? Pew is giving the public a sense of the scope of employee benefits. It's up to the union now to make the case that those benefits are warranted, and that the city needs to find a way to pay for them, whether it be by raising taxes or what have you.
Due to the City Administration going back on its word in the early 90’s, many employees just don’t trust them. We did givebacks then (decreased Holidays, the Draconian pension plan for new employees, etc.) when the City was in deeper trouble even than it is now.
The Pension Plan even lent money to the City when others turned it down flat. And what happened, we got kicked in the teeth in later contracts with the City wanting even more givebacks. Seemingly forgotten were those promises of rewards when the City had better days which it did later in the decade and into the beginning of the new Century.
Year after year I witnessed good employees leaving the Library system after either 10 years, when they were vested or 20 years when an employee stopped earning 2 1/2%/year of service under the old “J” plan.
I call the new plan Draconian because an employee needs to reach 60 to get full pension benefits. Let’s say you’re a non-professional worker right out of high school or even a community college and start work at 18 or 20. That means you will need to work 40 or more years to get a full pension from the City.
All that time, you are putting money into the Pension Fund and expecting the City to do the same. Why isn’t the State or PICA forcing it to do it?