Philly Teacher Union Diverts Pension Funds

How is this legal?

As surely as night follows day, teachers’ unions insist every year that Pennsylvania needs to spend more money on education. One of the loudest voices for more money is the Philadelphia Federation of Teachers (PFT). The PFT has long resisted any changes to their contracts that would save money for taxpayers. Through one contract provision, teachers in the Philadelphia school district pay nothing toward their health insurance.

Every year the PFT receives funding from the taxpayers of Philadelphia and the rest of the commonwealth to cover "supplemental" healthcare costs like vision and dental via a "Health and Welfare Fund". According to a Watchdog investigation, reported by PA Independent, the PFT "
more than $6 million from that fund was loaned, interest-free, to the union’s bleeding building fund, where it appears to have been spent on building maintenance and upgrades." Making matters even worse the "loan" had no definite terms of repayment. In other words, it doesn’t look like they building fund will ever have to repay the money.

This arrangement raises some questions. How is this arrangement legal? It sounds an awful lot like misappropriation of funds. How did the Health and Welfare fund generate a $6 million profit? How much has the union overcharged the Philadelphia school district for the benefits it is supposed to be providing for its members?

As the debate over tax increases continues, keep this story in mind.