Fat cats get fat on public dime
Former Rep. Todd Eachus' collection of extraordinary pension benefits that do not and cannot exist in the private sector illustrates a good deal of what is wrong with Pennsylvania's Legislature.
Mr. Eachus, 50, a Hazleton-area Democrat and former House majority leader who lost to Republican Rep. Tarah Toohill in 2010, will receive a full pension worth more than $34,000 a year after just 14 years in the House. Most people in the private sector could not accumulate that benefit in a lifetime.
But state lawmakers write the rules for their own defined-benefit pensions and they have not spared themselves largess at public expense. In Pennsylvania, a lawmaker 50 or older with just three years in office is eligible for a full defined-benefit pension.
And that's not all. Mr. Eachus was able to withdraw $96,478 in a lump sum - the combined amount of his own contributions to his pension and 4 percent interest per year.
Mr. Eachus is not alone, of course. He is playing by the rules that he and his former colleagues have concocted.
Despite such obvious excess, current lawmakers claim they can't do anything about it, that the state constitution precludes any reduction in pension benefits. Whereas the state must honor its commitment to benefits already accumulated, it is preposterous to suggest that it cannot adjust compensation going forward - benefits not yet accumulated. The compensation law of gravity, they believe, applies only to the private sector.
Meanwhile, the pension crisis created by the Legislature remains the greatest financial problem facing the state government, sapping resources that are needed for all other services.
When lawmakers brazenly raised their own pensions by 50 percent in 2001, they increased benefits for state employees and teachers by 25 percent. Then they deferred funding the increases, after their rosy financial projections proved to be fantasies. The result is that taxpayer contributions to the bloated pensions will rise from $1.7 billion this year to $6.2 billion per year in the 2016-2017 fiscal year.
Lawmakers so far have proposed keeping their unwarranted benefits while shifting new state employees to a defined contribution plan, akin to the 401(k) plans with which most private sector workers, who have pensions, are familiar.
They need to do much more, beginning with reducing their own benefits going forward as a precursor to overall reductions. Otherwise, exponential increases in their own compensation will be the hallmark of too many legislative careers.