Meadville Tribune

Opinion

April 20, 2014

Public pensions for private lobbyists under fire

HARRISBURG — Employees of the Pennsylvania School Board Association don’t work for any of the state’s 500 local school districts — not directly, anyway. They lobby lawmakers on behalf of those districts for things like funding.

It’s strange, then, that 60 retirees from the association collect benefits from the state’s Public School Employees Retirement System, the same plan used by teachers and other school workers.

Another 58 active employees of the association are pension members, which means they’ll get benefits when they retire, said pension spokeswoman Evelyn Tatkovski.

Legislation to unravel this arrangement is so broadly popular in Harrisburg, even the powerful school board association can’t muster the strength to oppose it.

The association’s employees aren’t school teachers. But, for pension purposes, they’re treated the same.

Pension contributions for those employees follow the same formula, with a portion covered by state tax dollars. The portion that would normally be covered by a school district is instead paid by the trade group, said Steve Robinson, an association spokesman.

The school board association is unique. It’s the only outside association whose employees are enrolled in the public pension.

However, workers in the state’s intermediate units — regional groups that provide services and training to schools — also belong to the pension.

The association’s special deal came to light last August, when an investigation by The Associated Press turned up examples in 20 states of lobbyists for local governmental groups who are included in pensions meant for public employees.

But the arrangement isn’t new. Employees of the school board lobbying group have been allowed to enroll in the pension since the 1930s.

Pension officials pondered the question of how to justify their membership as recently as 2005. Gerald Gornish, the pension’s chief counsel, wrote at the time, “they are considered governmental employees for retirement purposes” since the association, itself, is funded by local school district tax dollars.

(Yet, the school board group claimed itself a private organization when asked to explain how much it spent on speakers at its convention last year. The association claimed it was not required to comply with the state’s Right-to-Know law.)

The Senate finance committee has voted unanimously to bump all future employees of the association from the pension system. And the association is not pushing back. Instead, it’s backing the bill now before the full Senate.

“We believe that PSBA must lead through example,” John Callahan, the association’s senior director of governmental affairs, wrote in a letter to lawmakers, alluding to the state’s larger pension crisis.

Sen. Mike Folmer, R-Lebanon County, prime sponsor of the bill to end public pensions for the school board association, noted in a memo to lawmakers that “Pennsylvania’s public pension systems are drowning in red ink.”

The Public School Employees’ Retirement System has unfunded liabilities of more than $27 billion. The other main public pension fund, the State Employees’ Retirement System, has unfunded liabilities of more than $17 billion.

If the school board association is setting an example for how the state should tackle its larger pension liability, that example so far does not include tampering with benefits of current employees.

Few lawmakers seem willing to tread that path, either.

Gov. Tom Corbett initially suggested the state might change benefit rules for current workers, but every subsequent proposal has taken a different tack. All recent proposals focus, like the bill for the school board association, on benefits of new employees.

Robinson said the association’s situation is unique. The pending bill will completely shut off the pension fund to all of the group’s future workers, who instead will be enrolled in a 401(k) plan.

Most broader pension reform bills circulating in the Capitol still extend benefits to future government employees. They just change the way benefits are earned.

Robinson said the trade group has not taken a position on any of the proposed solutions to the broader crisis.

John Finnerty reports from the CNHI Harrisburg Bureau for The Meadville Tribune and other Pennsylvania newspapers owned by Community Newspaper Holdings Inc. Email him at jfinnerty@cnhi.com and follow him on Twitter @cnhipa.

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