Act 9 gave away additional benefits without putting in place funding for them
Act 38, 40, and 46 cut contributions from employers and the state
Stock market declines dropped the value of assets in the fund How do we connect these three actions to the $32.6B unfunded liability in PSERS today? The administrators of PSERS have done that for us in their most recent annual report. They divide it up this way:
$14.0B - Due to Employer Funding Deferrals
$9.0B - Due to Investment under-performance
$8.9B - Due to Unfunded Benefit Enhancements
$0.8B - Due to divergence between experience and actuarial assumptions (demographics, salaries, etc) When thinking about solutions, which I will cover in a future post, it will be useful to keep this causality mind.
Pennsylvania State Education Association (Teachers Union): PSEA - What Happened
Pennsylvania Association of School Retirees : Fix It
Pittsburgh Public Radio, WESA FM: PA funding crisis
Central Penn Business Journal: History of PSERS
PSERS - An Emerging Problem
What is PSERS
PSERS - How are benefits earned?
How is PSERS funded?
How does pension valuation work?
PSERS - How bad is the Under-funding