The following was sent to us by friend and colleague Rick Dreyfuss – a former executive at The Hershey Company active in public pension reform who now serves as a business consultant and actuary.
As a national firm with headquarters in Pennsylvania we like to stay current with local politics. Doing so means paying particular attention to the hotly contested race for governor between the unpopular incumbent Tom Corbett and Tom Wolf – chairman of family-owned The Wolf Organization.
An issue making headlines is pension reform. Specifically, the state has sizable unfunded liabilities (or promises/IOUs if you wish) owed to state workers, teaches and the like. As this situation is not unique to Pennsylvania but, instead, is a common one faced by many states it’s a worthwhile exercise to listen to the rhetoric.
A subset of the pension issue is teacher pensions. Mr. Wolf in particular has been all too eager to attack Governor Corbett about school funding implying the incumbent is stealing from the education of children. The part conveniently left out is the contribution Pennsylvania makes to fund a portion of teacher pensions. To view the issue in totality Governor Corbett is not seeking to cut educational funding as he is the governmental contribution to teacher pensions. Put another way Governor Corbett is seeking a method of pension reform.
Mr. Wolf would have taxpayers and voters (who aren’t necessarily an overlapping group) believe that his policies won’t steal from the children. In fact his plans to sustain an unsustainable pension system do indeed steal from the children – the next generation of them. He seeks to win current office by kicking the proverbial can down the road for future generations to address. It’s intellectual dishonesty in the highest.
At Apollo we remain apolitical. It won’t stop us, however, from commenting when the words and actions of politicians impact the wallets of our clients.
How will the Pennsylvania race turn out? What will be the swing factors? Will it be a plea towards emotion or nod to fiscal reality? What are your thoughts? We’d like to know.
Leave A Comment