Political Pressure On Pensions
It took an economic meltdown, but pension reform is finally back on the table in Massachusetts and we support Gov. Deval Patrick’s efforts to bring a system rife with abuse and calculated manipulation into line with the state’s present priorities.
A pension plan is better for employees than a 401(k), but it doesn’t come cheap. In fiscal year 2009, the state is on the hook for $1.31 billion in pension costs. In 2010, that number is projected to increase to $1.37 billion, and in 2011 pensions will cost the state $1.44 billion.
Target Is Set
Patrick’s proposal targets several sources of waste and skullduggery for reform, and if implemented, the reform would indeed be comprehensive. But pension abuse is not, as Patrick perhaps coyly argues, “the gaming of the system by a few.”
Pension abuse is systemic and entrenched, and with billions in retirement benefits to fund, Patrick should be ready to use much stronger language to make his case. He’s right that loopholes through which government officials collect double pensions or inflated payouts “makes citizens question the integrity of their government.”
But pension abuse is so common and has been going on for so long that the abuses seem like entitlements to many state employees. And this is not news to a citizenry accustomed not only to questioning, but seriously doubting, the integrity of its government.
Every year, newspapers around the state uncover manipulation of the pension system that is only deeper and more crass than it was the previous year.
Absentee positions on unpaid, non-government local boards that qualify state employees to collect pensions that far exceed their entitlement and old laws that provide state judges with a judicial pension while also qualifying them for a state pension are just two of the “loopholes” Patrick wishes to close.
Patrick’s proposal also calls for doing away with the “uncommon and excessive” benefits doled out by the MBTA, a notorious backwater of graft, nepotism and abuse currently burdened by $8 billion in debt and from which employees may retire, fully pensioned, after 23 years.
The reforms would also keep employees from including the value of non-salary items like housing, transportation and retirement annuities in their pension calculations.
They would remove a provision that allows an employee who works just one day in any given year to include that entire year’s salary in his or her pension calculation and do away with a provision that allows 20-year employees who are terminated to collect “enhanced” pensions before the age of 55.
The men and women who dedicate their careers to the state of Massachusetts deserve a fair, perhaps even generous, retirement benefit. Many of their jobs are thankless, difficult and dangerous.
We see no reason why the state should not fund a leaner, more accountable and cost effective pension system, despite its relative obsolescence.
But state employees should feel privileged that the government maintains an anachronism like the defined benefit pension when all but the most old-line businesses have either done away with such plans in favor of defined contribution arrangements like the 401(k) or formulated some less costly hybrid of the two.
Patrick is on the right track with his proposed reforms, but if he is to be successful, he’ll have to be aggressive and forceful in his attack rather than pretending that the widespread abuses he wishes to end have only recently been perpetrated by a nefarious few.
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