Category: Pension

By Sen. Scott Wagner

Contained in this column are two articles from the Patriot-News.

The first  was published May 6 by reporter Jan Murphy.

It is titled “Set for Life –Browse the database to see who is getting a six-figure annual pension”  Click here to view it.

The second article was published May 7 by reporter Charles Thompson. It is titled – “How PA state workers and teachers calculate their pensions” and can be read here.

The first article exposes the six-figure annual pensions of many retired Pennsylvania state government and school district employees.

Number one on the list is a retired Pennsylvania State University employee who is receiving $39,799.23 per month for a total yearly annuity of $477,591.

Number two on the list is another retired Pennsylvania State University employee who is receiving $36,989.98 per month for a total yearly annuity of $443,880.

These numbers do not reflect the health benefits that retired state employees are also receiving.

Please take note that of the top 25 people on the list, 13 are Penn State University retirees.

I have reported in the past that I serve on the Senate Appropriations committee and our committee is in the process of reviewing the governor’s budget.

I am scratching my head wondering why last year the State of Pennsylvania contributed approximately $230 million dollars from the general fund to Penn State University and this year Governor Wolf’s budget is proposing a $50 million dollar increase this year to Penn State for a total of approximately $280 million from the general fund to Penn State.

During Appropriations hearings last month I specifically asked the President of Penn State University for their financial statements to allow our committee to understand how much cash Penn State currently has in its various bank accounts and endowments.

Here is the head scratching thought – why is the state giving Penn State any money when it appears the money is going to subsidize breathtaking lifetime pensions when in fact the money should be going towards the education of their students?

I am not trying to single out Penn State University –  I am just stating the facts.

I have mentioned in previous email blasts that retirement and health benefits state employees receive are completely out of line with the private sector and they are virtually unsustainable.

For anyone wondering why Pennsylvania taxes are so high, these articles are crystal clear examples.

The second article explains how pension benefits are calculated stating that, “So as the plan exists now, a PennDOT foreman with 35 years of service could retire with pension income equal to 87.5 percent of their average pay for the last three years on the job.”

Excuse me – did I read that right?

In the last 3 years of a PennDOT foreman’s employment it is not unreasonable that this person could spike their gross income to $100,000 annually or more for the last 3 years of their employment so that an average of the 3 years could very well be $100,000 or more.

At $100,000 per year average for the last 3 years this person would retire with $87,500 per year to start for the rest of their life, plus lifetime healthcare benefits.

So a foreman could tell his wife – “Hey honey, I’m going to spend the next 3 years working as much overtime as I can so I can drive  my annual compensation up as high as possible so I’ll get a gold-plated pension when I retire – I’ll be back in 3 years!”

Reading articles like this combined with what I have learned since taking office makes me sick to my stomach.

This is the exact reason why I have introduced legislation such as my Taxpayer Fairness in Compensation Act.

These articles are more examples of how working class families are the ones who continue to get exploited in Pennsylvania.

Below is a graph from PennLive of the Top 40 highest pensions, but to view and search the full database of the thousands of retired state government and school district employees receiving over $100,000 per year in pension benefits, click on this link or look below.

 

 

By Sen. Scott Wagner

Beginning on Monday, March 16 and concluding yesterday, April 2, the Senate Appropriations committee held 35 hearings at which time each state department acting secretary testified to the committee as to their specific department budget for the 2015-2016 year.

Sen. Pat Browne from Lehigh County is the Chairman of the Senate Appropriations Committee.

Sen. Browne is a certified public accountant and attorney. He also was a tax manager for Coopers and Lybrand from 1990 to 1994 and a tax supervisor for Price Waterhouse from 1986 to 1990.

I would like to point out that I am impressed with Sen. Browne’s leadership on the Appropriations Committee, his level of expertise in tax matters, his knowledge of the law as it relates to the budget and his knowledge of the Pennsylvania budget.

I am also honored to be working with other senate members who have spent a great deal of time and effort getting a grasp on Governor Wolf’s breathtaking budget.

The committee hearings were very informative and went into great depth of each department.

The area that I find most troubling is the excessive cost of benefits for state employees.

In the private sector world the percentage of benefits over and above an employee’s annual compensation would rarely ever exceed 50 percent and in most private sector industries the percentage is closer to 40 percent.

The documents show the largest driver of the benefits are health care and pension costs – they are wildly out of control.

For example, the Department of Corrections benefits are in the range of 73.5 percent to 79.3 percent over the annual compensation of each employee.

The average corrections worker makes approximately $55,911 annually – add on 73.5 percent for benefits for a grand total cost per corrections employee of $97,005 annually – the benefit cost is a staggering $41,095 per employee.

Using the private sector benefit factor of 50 percent on a corrections employee’s annual compensation of $55,911 annually the benefit cost would be $27,955 per year instead of $41,095 – a reduction of $13,949 per corrections employee.

The Department of Corrections has 14,770 employees – multiply 14,770 employees times $13,949 per employee and the Department of Corrections is paying at least $206 million dollars more in benefits than the private sector using a 50 percent benefit factor.

If I used a 40 percent benefit factor instead of 50 percent the state is paying $276 million dollars more than the private sector just for the Department of Corrections.

The Department of Corrections is only one department and the silent creeping of benefit costs for PA state employees is why we are financially where we are today.

Include all departments in the state and PA is clearly paying in excess of $1 billion dollars annually more than the private sector and has been creeping up for years – this year just happens to be the year to pay up.

I will continue to send any pertinent budget information to you all as we get closer to the June 30  budget deadline.

My prediction is that we will not meet the June 30  budget deadline and it is going to be a long, hot summer in Harrisburg.

At this link are documents that detail the state departments benefit rates.

Sen. Wagner represents the 28th Pennsylvania Senate District.

State Worker Pensions Extreme In Pa.