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30-and-out early retirement should be considered

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Friday, April 25, 2003

Pennsylvania lawmakers are considering legislation that would offer early retirement incentives to public school teachers and state employees.

Critics of the proposal point to heightened costs to pension funds, resulting from an anticipated high number of teachers and state workers taking advantage of the incentive.

The other side of the coin, which attracts our support for the measure, is a decreased cost to those who pay taxes to school districts.

Early retirees would be among those teachers making the most money. When they retire, they are replaced by lower-paid teachers, saving districts, and taxpayers, personnel costs.

The "30-and-out" measure, sponsored by state Rep. Peter Daley of Washington, would allow teachers and state workers to retire after 30 years of service and receive full benefits. Normally, they must wait until they have at least 35 years of service.

Opposition to the measure is coming from the Public School Employees' Retirement System and the State Employees' Retirement System, which administers pension funds, respectively, for public school teachers and state workers. Officials claim the early retirement plan proposed by Daley, which would be offered for two years once implemented, would result in significant additional costs. Dale Everhart, executive director of the Public School Employees' Retirement System, would cost at least $448 million more over the next decade to fund pensions for early retirees. John Brosius, executive director of the State Employees' Retirement System, said the measure would incur on the state workers' pension fund an additional $308 million to $415 million.

Also opposing the measure is the Pennsylvania School Boards Association, which fears that if a high number of teachers take advantage of the early retirement incentive, some schools will be left with too many young and inexperienced teachers.

The PSBA is also opposed because employees aren't required to pay for additional costs to pension plans.

For his part, Gov. Ed Rendell has stated his support of early retirement legislation. But a spokesman said the governor won't push lawmakers to approve legislation this year because of the state's "current fiscal situation."

We appreciate the concerns expressed by administrators of teachers' and state workers' pension plans over increased costs to those plans resulting from early retirement. And although we appreciate the PSBA's concerns over the possibility that experienced teacher would jump in droves at the early retirement incentive, we don't see it playing out that way.

Rather, we envision a handful of teachers from each public district leaving early, providing those districts and their taxpayers some much-needed savings.

Speaking of taxpayers, discussion over the early retirement proposal offered by Daley, and how it will negatively impact certain groups, seems to ignore a major constituency that would be impacted by this issue: the taxpayers.

Taxpayers need relief from the state from the ever-increasing costs of operating our public schools and maintaining a level of services. For that reason, we feel that the governor and the legislature must give serious consideration to offering early retirement incentives.

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