Pension Crisis

Former Penn State VP Jailed for Sandusky Child Sex Scandal Gets $300K Annual Pension

One of the highest retirement payouts in the state. Pennsylvania is dealing with $70 billion in pension debt.

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John Greim John Greim Photography/Newscom

More than 500 retired state and public school employees in Pennsylvania are collecting six-figure annual pensions, including one of the men jailed for his role in covering up the Jerry Sandusky child sex abuse scandal at Penn State University.

Gary Schultz, a former vice president at Penn State, was sentenced to two months in jail earlier this year after pleading guilty in March to a charge of child endangerment. Even so, he'll be collecting a $330,000 annual pension for the rest of his life. He is one of 20 former state employees getting more than $250,000 annually from a state pension system facing a $70 billion shortfall, according to an analysis of state pension data published this week by Maddie Hanna of The Philadelphia Inquirer.

Philly.com published the list of the 500 pensioners pulling down more than $100,000 annually, 124 of them former Penn State employees. Rodney Erickson, the school's former president, gets $477,000 a year, biggest pension in the state. Another 143 of the six-figure pension recipients worked at other public universities in the state.

Those big pension payouts are outliers, of course. The average retiree gets about $27,000 annually, according to the Inquirer review. Still, they are rightly being scrutinized as the state (like many others) tries to address a budget-busting pension crisis.

Pennsylvania's Republican-controlled state house and Democratic Gov. Tom Wolf came together earlier this year to pass a series of reforms that included some caps on big pensions and changes to how future employees will have their retirement benefits funded. Those modest reforms will help reduce long-term liabilities, but because they only affect new hires, it will take decades for the current debts to disappear.

Annual payments into that system will cost Pennsylvania taxpayers more than $4 billion this year. Those contributions will continue to grow annually through the early 2020s—accounting for as much as 10 percent of the state's whole budget by 2019, according to the Wall Street Journal—before leveling off and eventually declining over the course of several decades as current enrollees stop collecting benefits when they die.

Still, the big pension payouts in Pennsylvania pale in comparison to what some retirees in other states are getting. As I reported last month, more than 62,000 California retirees get pensions in excess of six figures, including a handful of pensioners who get a cool $1 million (or more) each year for doing nothing.

The comparison isn't apples-to-apples, though. Most local government workers in California are included in the state pension system, while Pennsylvania only puts state workers and employees at public schools and state universities in the state-run pension systems. There are another 2,500 local pension plans in Pennsylvania to cover the retirement costs of municipal workers (that's about a quarter of all municipal pension plans in the entire country), and many of those local retirement accounts are in even worse shape than the state-run plans are.

That means the Inky's data, while useful, is not a complete picture. There are surely many more public sector workers in Pennsylvania getting golden nest eggs partially funded by state taxpayers.

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  1. Football and public employee unions > the innocence of little boys.

    1. But, but, Joe Pa!!

    2. Were those boys dues paying members of the union? If not, they are not the union’s concern. Much like the teachers’ union isn’t concerned with students.

  2. Did they contribute to the pension and/or work under an agreement that it would be provided?

    Then they get it, even in jail.

    1. Depends, morality clause? Just like the Miami dolphins taking Ricky Williams to court to reclaim bonus payments because of his violation of the contract.

  3. “The average retiree gets about $27,000 annually, according to the Inquirer review.”

    These stats are bogus because they include partial-career employees and people who retired prior to the early 2000’s huge pension increases.

  4. You’re just nittany picking.

  5. You aren’t kidding about California. I looked up the pension for a high school homeroom mate of mine: he retired in 2015 from Univ. of Cal. with a pension of $357,000 per year with, according to the database, 7 years service! (Database probably understates his service as I recall he worked his way up to the top where he was the boss of the entire California state college system.)

  6. before leveling off and eventually declining over the course of several decades as current enrollees stop collecting benefits when they die

    See, if they’d have had a _real_ union they wouldn’t have gotten ripped off like that. If you can vote, you can collect a pension, I say.

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