APRIL 10, 2014: In the Sunday, March 23, 2014 edition of the Boston Globe, conservative opinion columnist Jeff Jacoby penned an op-ed titled “Public pensions are eating taxpayers alive”.
APRIL 10, 2014: In the Sunday, March 23, 2014 edition of the Boston Globe, conservative opinion columnist Jeff Jacoby penned an op-ed titled “Public pensions are eating taxpayers alive”. Association President Frank Valeri answered Jacoby’s off-based assertions with his own letter to the editor, which has yet to be published by the Globe. We believe the letter is worth sharing with our members, policy makers and the public at large.
April 3, 2014
To The Editor:
I was glad to read in the Boston Globe’s Op-Ed story; “Public Pensions are Eating Taxpayers Alive” on Sunday, March 23rd that nationally recognized conservative columnist Jeff Jacoby hangs with friends that are lifetime government employees. Unfortunately, his inference and broad-brush conclusions about the Mass. public pension systems are not factually accurate.
While it might be easy to refer to the public retirement system anomalies in crisis, such as San Jose, Vallejo, Detroit and Central Falls, we should recognize these as extreme cases and view them as relevant conversational points, but really apples and oranges when comparing them to our public pension systems here in Massachusetts.
In other jurisdictions, several significant areas such as local economic factors, plan benefit structure and participant contributions, along with state oversight of public pension plans, are a factor.
Thankfully, those negative conditions and loose oversight do not exist here in Massachusetts. In fact, recent “reforms” have tightened up already well-run public retirement system by closing potential loopholes and modernizing retirement benefits.
Not one of the cities referred to in the article are comparable to our pension plans with respect to plan benefits and employee contributions. In fact for the past 17 years, Massachusetts public employees have contributed at a rate that is considered one of the highest in the country – 9% on the first $30,000 and 11% on additional compensation. Official state and private actuarial studies have confirmed that today’s public employees largely fund most, if not all of their future retirement benefit.
Unlike Central Falls, which awarded full pension benefits to police and fire with 20 years of service, here police and firefighters must contribute for a minimum of 32 years and reach the age of 55 before achieving the maximum pension benefit of 80%. And all other public employees must have the same total service upon 65 years of age. No Mass. retiree can be receiving a “lavish pension” with “as much as 90% of his or her former salaries”, as found in San Jose, according to Mr. Jacoby.
One of the most significant differences between Massachusetts and most all other states is the strict government oversight that all of the Massachusetts 105-retirement systems are subject to. The Public Employee Retirement Administration Commission (PERAC) is charged with the review, oversight and regulation of pension benefits, as well as the retirement systems themselves. This structure in unique to Massachusetts and now serves as a national model for best practice and oversight.
I must also point out the simple fact that all Massachusetts public employees do not contribute to the Social Security plan and, as such, are not eligible to receive these benefits. A public sector employee who works two jobs or has a split career in public and private sector employment that paid into Social Security will have their benefits significantly reduced.
Moreover, some $707M in state taxpayer money was saved in 2012, because the Social Security FICA assessments were not charged to the Commonwealth. This fact can’t be ignored.
I respect anybody’s “Opinion” on these issues, but such opinion should be based on all relevant facts not just facts that support the “Opinion”. Otherwise it’s not an “Opinion” it’s an Agenda!
Frank Valeri
President
Retired State, County and Municipal
Employees Association of Massachusetts