Whether it’s combating threats from the state capital regarding its membership’s pensions or taking a stance on the School District of Philadelphia’s recent decision to boost the pay of executives, American Federation of Teachers President Ted Kirsch has been a very busy man.
At the top of Kirsch’s agenda is the broad threats to his membership’s pension plans that he feels emanating from Gov. Tom Corbett’s office.
Currently, the pension for ATF membership is derived from three sources: employee buy-ins, where an employee funds their own pension through paycheck deductions; the school district then funds a third, while the state kicks in the final portion. That money is then invested into various hedge funds to gain positive returns.
Kirsch contends that the state hasn’t paid in to the pension for roughly a decade, but his membership is being asked, unfairly, for more concessions.
“The issue with the pension fund is the $41 billion shortfall that the governor’s office says it has, and I don’t think it’s that much, but that’s not the issue. One, the state did not [make pension payments] from 2000 to 2010. Secondly, the fund has been doing fairly well in investments. So the state, [in essence], gave the school districts a holiday, told them they didn’t have to make their contribution.”
According to the AFT, the employer rate from 1999-2000 school year to the 2010-11 school year ranged from 0 in 2001-02 to a high of 6.44 percent. At no time during that period did the employer contribution (which is split between the school district employer and the state) match or exceed the employee contribution of 6.25% of gross wages in 1999-2000 and 2000-01 and the current rate of 7.5 percent, which is what all employees hired since the 2001-02 school year pay.
“Keep in mind that we got hit with unpredictable consequences. The stock market took a dive twice, so the fund was doing well, and all of a sudden, it took a big hit and that led to the problem as we see it,” Kirsch explained. “We saw this coming. As a result, in 2010, we were able to get together with other employee organizations, Republicans and Democrats, and in a bipartisan fashion, made some changes. Some of the changes we’ve made include increased employee contributions, capped maximum retirement benefits, increased the retirement age from 60 to 65 and increased the number of years you could vest from five to ten. We anticipated making some changes.”
Kirsch is now asking that Corbett and the state legislature give time for these reforms to work.
“There is another solution to the problem of underfunded pensions that would require that Gov. Corbett and legislators end their policy of giving tax cuts and tax credits to big corporations and close loopholes that allow profitable companies to pay little or no taxes in Pennsylvania,” Kirsch said. “It’s time to let the 2010 pension reforms work or consider raising revenues to fund public employee pensions. Public employees should not be asked to make more sacrifices. They literally already gave at the office.”
While his membership – including Philadelphia Federation of Teachers President Jerry Jordan and his team - convenes a meeting in Rhode Island that will cover common core state standards in regard to school district curriculums, teacher evaluation and development, Kirsch took issue with the School District of Philadelphia’s recent decision to give pay hikes to nonunionized district officials; media reports say those raises could be from anywhere between 13 and 49 percent. This comes on the heels of the district informing union members earlier this year that they would not give previously agreed upon three percent raises to unionized staff, as the district was under financial distress.
“What is very disturbing to me is that they are asking, and have asked, so many people to make sacrifices,” Kirsch said. “The Philadelphia Federation of Teachers has gone years without raises and recently gave back $58 million in a loan. The [unionized workers] are among the lowest-paid workers.
“And [the PFT] just agreed to three years without raises, and that’s a sacrifice these people made,” Kirsch continued. “How do you justify giving people significantly more raises? If you say they deserve it, well, who deserves it more than the people in the classroom? These are the people on the front lines.”