Iliya Atanasov, Pioneer Institute, writes an opinion “Pension obligations need to be a priority” in the Boston Globe on April 28, 2014 (see attached). PERAC would like to pubically respond to his Opinion.
http://www.bostonglobe.com/opinion/2014/04/28/podium-pension/HVG03ugohSI45C5sdIhl1K/story.html
The Public Employee Retirement Administration Commission or PERAC was established by Chapter 306 of the Acts of 1996 and was created for and is dedicated to the oversight, guidance, monitoring, and regulation of the Massachusetts Public Pension Systems. The professional, prudent, and efficient administration of these systems is the public trust of PERAC and each of the 105 public pension systems for the mutual benefit of the public employees, public employers, and citizens of Massachusetts. The stewardship of the Trust Funds for the sole purpose of providing the benefits guaranteed to the public employees qualifying under the plans is the fulfillment of the obligation of the people of the Commonwealth to those who have dedicated their professional careers to the service of the people of the Commonwealth. A few of our major oversight responsibilities include the supervision of the state’s disability retirement system including fraud prevention, provide audit and actuarial functions, provide legal and investment advice as well as providing analysis on legislation impacting pension systems.
First, we are pleased that Mr. Atanasov acknowledges that the State’s share of pension funding has declined – while the employees’ share has risen. In plain language – this decline for the State means that taxpayers’ responsibility for state employees’ pensions has been reduced.
Massachusetts state employees since 1996 are paying 9% on the first $30,000 of salary and 11% on salary above $30,000. Indeed, in many instances, a Group 1 employee (administrative, clerical, etc.) hired after 1996 who spends his/her entire career in State service will more than pay for his/her own pension. This fact – largely unknown to Massachusetts’ citizenry – should be frequently referenced. In addition, public employees in Massachusetts are not eligible to participate in Social Security for their service as public employees – and many rely on their state pensions and private savings for their retirement.
Mr. Atanasov states that a significant unfunded pension liability exists. This is accurate – due in large part to the fact that in the years prior to the establishment of a funding schedule in 1988, the State was on a “pay-as-you go” basis for funding its pension system. Yet, he notes that “state leaders announced an accelerated funding schedule to eliminate the state’s pension liability by 2036…but this is the tip of the iceberg”. This is a mere passing acknowledgment of a significant achievement in enhancing pension funding nor does he mention the three other significant pension reform initiatives of Governor Patrick, the House, and the Senate over the past several years.
He also muddies the difference between pension funding and funding for Other Post Employment Benefits – or OPEB costs – such as retiree health care. That is the “tip of the iceberg” to which he refers but this distinction is obscured in the article. He is correct that funding of major OPEB liabilities is an important issue – but it does nothing to enhance the public debate by confusing the two.
We also take issue with Mr. Atanasov saying that “drastic measures…will become inevitable without meaningful reform”. Such measures are not “inevitable”. The State has undertaken three major pension reforms during an almost unparalleled stretch of economic hardship and distress while confronting numerous other critically important priorities. OPEB costs are a considerable concern. Yet, there is no reason to believe that the Commonwealth will fail to confront the challenges of OPEB funding in the future in the same manner as it has pension funding.
Joseph E. Connarton
Executive Director
Public Employee Retirement Administration Commission
McGovern retired at 58 after making $200K in her final year. Her pension is $163K but it gets better. It was determined she has a heart “condition”, so now her fat pension is tax exempted at the federal level, saving her $25K a year. Talk about who doesn’t pay their fair share in taxes. And the guy McGovern replaced, he too went out on a heart “condition”. We are suckers in this state.
http://www.telegram.com/article/20120727/NEWS/107279716/0&template=MOBILE
And an old guy has a heart condition, I am shocked, shocked I tell you. I am sure you are just as equally disgusted with ObamaCare, for identifying someone with a heart condition, before they actually died.
Damn You Modern Medicine!
Gabrial Gomez Tax Deduction
Reminds me of firefighter claiming to have a bad back and on disability, yet lift weights and a professional body builder.
http://www.boston.com/news/local/massachusetts/articles/2011/08/16/former_firefighter_found_not_guilty_of_disability_fraud/
Dude, my late father had at least two of his heart attacks while in his 50’s and had his bypass surgery when he was about 60 years old, and I am a grand old 54 years old and had a stint put in my heart last year, so enough with this “Can’t have a heart condition at 50” crap, because you don’t know what his medical history is. You don’t know Jack!
Independent doctors did not review their applications or heart condition. Nor did McGovern mention this “ailment” to Deval when she got promoted.
Both should be paying federal taxes on their pensions, disability or not. Give us a break.
Just because there may be a few bad actors doesn’t mean you should ditch pensions for everyone who is playing by the rules. It makes no sense.
They want to throw out the baby.
Step 1: Ignore the many who follow the rules and focus on a few criminals. Step 2: Cite these unrepresentative examples to justify draconian pension cuts, I mean, “pension reform.”
as if it is impossible for someone in their 50’s to have a heart condition, it can only be a scam on the pension system. No other possible answer exists. You are so full of “crap”.
You might find interesting a new report by the Urban Institute, as reported by Beth Healy of the Boston Globe (http://www.bostonglobe.com/business/2014/05/01/massachusetts-pension-plan-ranked-worst-nation-washington-think-tank/NmlY5TiLeDRPr2mFgGFccM/story.html) in an article entitled “Mass. Pension plan ranks worst in US, study finds,” which appeared on 5/1/14.
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Let’s not kill the pensions system. And let’s not turn it into a full-bore 401(k) system (that would be unfair given the lack of a Social Security safety net). But let’s get more transparency and accountability, and let’s make some real fixes. The fact is that most public employees invest a fair share into their pensions — they deserve better from the folks running the system.
Yes, it was “Public Employee Pension Week” at the Boston Globe. As I commented in the Globe Podium piece by Iliya Atanasov “For those who are new to “the conversation” Jim Stergios is Executive Director of the Pioneer Institute. The Pioneer Institute is a Libertarian organization promoting the privatization of government by undercutting union wages, transferring costs onto other payers, and reducing service provisions. People and communities most harmed by Pioneer Institutes privatization schemes are mostly those who are economically and socially disadvantaged. The Pioneer Institute is really a “strategic marketing firm” for corporations and industries that want to increase their wealth by decreasing the quality of life for real people who actually do the work. Don’t be hoodwinked! Back in 2002, two of the Boston Globe’s own, Paul Dunphy and Mark Umi Perkins, wrote a great report about the Pioneer Institute called, “The Pioneer Institute Privatizing the Commonwealth.” The information I gleaned from their report is as relevant today, maybe even more so, than it was in 2002! It is worth a read and reread!”
The Governor of Texas who let a man be executed when there was no evidence that a murder had occurred?
There’s a government abuse of power, and the Pioneer Institute praised the man responsible for it. You can tell they are not a real scholarly institute by these sorts of actions.
Moving good private sector jobs from a deep blue state to deep red. Maybe the Pioneer Institute honored Gov. Perry b/c of his pro-business attitude in attracting companies to relocate to The Lone Star State.
I pointed out a year ago how Texas beat out Massachusetts to build a new locomotive plant. Gov. Perry secured 500 jobs for Texas. Where was Deval or Tim Murray? Oh right, we get new casinos instead. Where was the congressman who represents Lynn? Did he bother to lift a finger?
http://www.siteselection.com/ssinsider/bbdeal/no-doubting-thomas.cfm
The key section of Globe/Healy’s piece on the Urban Institute study is:
The Urban Institute, a Washington think tank, gives Massachusetts a failing grade in its new study on public pensions, ranking the state the worst in the nation.
The institute cited low funding levels, as well as pension plan designs that it says hurt younger workers and fail to encourage older employees to work longer.
According to the study, Massachusetts receives a “D” for it’s plan’s funding ratio, along with numerous other states. It received an “F” for making required contributions, with three other states. — New Jersey, Pennsylvania, and North Dakota.
The state’s pension system, which covers Commonwealth employees and teachers, was 60.6 percent funded in early 2013. That compares with an average of 74 percent funding across all US states, according to the institute.
“Over the years, they’ve dug a pretty deep funding hole, and that’s getting worse,’’ said Richard Johnson, the project’s lead researcher. Even as Massachusetts has made reforms to its pension plans, most recently in 2012, Johnson said the state still “pushes older workers out the door but doesn’t attract younger workers.’’
I guess you missed my comments in the Globe articles Jim. I’ll include another one here for those of you who don’t subscribe to the Globe.
It must be really important!!!1!one!!juan1!1!!!
HaHaHa! Thanks for noticing Stomv, this issue is very important to a lot of Massachusetts seniors living on a fixed income! Articles on “pension reform” justifiably scare them! Now, passionate people use exclamation points! I can tell you’re passionate, you have 10! In one sentence! 😉
Let’s put the spin into perspective. “Greed is good”. As the middle class continues being decimated let us not forget this little cited fact: in the US the top 25 hedge fund managers earn a combined 21.1 billion dollars. So, 25 men make 2.5 times as much as EVERY Kindergarten teacher in the US combined. Now you want our already FUNDED pensions ? Your basis is fear mongering consertive “stink tank” studies? Indeed greed is bad, and wage theft should be criminal. LEAVE OUR PUBLIC EMPLOYEE PENSIONS ALONE! Redistribution of wealth cuts both ways – stop decimating the working class!