Taxpayers who contribute $5 billion a year toward the state government’s pension costs, and an amount equal to 34% of each school district’s payroll for education-related pension costs, now will have to pay legal costs related to a federal investigation of the Pennsylvania School Employees Retirement System.

PSERS has hired a law firm to represent it in the federal investigation, without disclosing the inquiry’s nature or scope.

But state Treasurer Stacy Garrity revealed that several of the plan’s top officials have received federal subpoenas, which is not the mark of an administrative inquiry.

The Associated Press cited several PSERS sources in reporting that the investigation involves the agency’s acquisition of land in Harrisburg and a recently disclosed, appalling $25 million ripoff of taxpayers.

State legislators emptied taxpayers’ pockets in 2001 when they bet, wrongly, that earnings generated by the state’s two big pension systems, covering state and public school employees, forever would cover benefits.

So they gifted themselves with unconscionable 50% pension increases, and provided state and school employees of lesser stature 25% increases.

Then, when the financial markets quickly proved the folly of that policy and system investments tanked, legislators refused to correct their own blunder, thus creating today’s massive pension debt.

One minor reform they did enact was called risk-sharing.

If the school pension plan failed to reach its annual investment target, school employees rather than taxpayers would pay the difference.

In December, PSERS concluded that the $62 billion plan had earned 6.38% for the year, a fraction higher than the projected 6.36%.

That saved employees from making additional contributions. PSERS later admitted that the plan actually earned less than the target, but because of the timing an additional $25 million in costs were passed on to taxpayers instead of 100,000 school employees.

This is preposterous governance. Regardless of whether the federal investigation finds criminal conduct, the people at PSERS responsible for this dereliction of duty and abuse of the public trust must be fired.

— Republican & Herald, Pottsville/TNS