Public Employee Benefit Reform (16 Responses)

During my recent campaign, I made public employee benefit reform a high priority and, having been reappointed to the Public Service Committee, I’ll be working hard on the issue.

There are seven compelling motivations for seeking public employee benefit reform:

  • Rising current costs of benefits (especially health care)
  • Deferred costs that will burden future taxpayers (pensions, but especially retiree health care)
  • Investment risk that may lead to additional burdens for future taxpayers (mostly pensions)
  • Administrative complexity that creates potential for waste and corruption
  • Disparity between public and private employees
  • Disparities among public employees
  • Abuses in the system

There are three fundamental reforms that we need to make in Massachusetts that will go a long way to addressing these concerns:

  • Reduce the maximum guaranteed pension benefit, to bring it in line with social security (reduce contributions proportionally).
  • Require public retirees, especially those under 65, to contribute more for their health care.
  • Give municipal mangers more authority to control plan design.

Elimination of risk and abuse in the pension system requires more complex reforms, but limiting the maximum benefit would help a lot.

Your comments on this issue will be much appreciated. Or you can reach me by phone or email if you prefer. I’m also eager to sit down with groups or individuals who want to have more extended conversation about these issues.

Make a comment

  1. JimMunsey says:

    In a meeting I attended with Gov. Patrick during his campaign last Fall, the audience brought up a few points regarding the pension plans in the state. One was to move the eligible retirement age to match the criteria and sliding scale of Social Security. At the time there was discussion to make that a gradual change as newer employees come on board. I think if you are working for less than 10 years, this change should be immediately adopted. For those over 10 years, move the retirement age out X number of years. Further, I don’t want anyone eligible to retire just because they have worked for X number of years. Age should be the primary determinant factor.

    As for health insurance, I agree with those already posting to this chain of comments. Contributions from employees should match those of the average private sector employee. Giving municipalities the option to join more cost effective health plans negotiated by other cities, towns and/or the state should be adopted ASAP.

  2. jefflevinscherz says:

    Will – Important points.

    Across the country the cost of health care is forcing municipalities to fire teachers, policemen, firemen, and not pave the roads. The most compelling thing that can be done quickly to give local governments in Massachusetts some relief is to make it far easier for these governments to move to the Group Insurance Commission. This means letting the GIC negotiate on the towns’ behalf, and requires accepting the GIC standard benefit design, which is less rich than some of the current local benefit designs.

    Your other readers have already pointed out that the real issue is the rapidly escalating cost of health care. This is a problem for all businesses – not just local government. The most recent Patrick Administration bill to push away from fee for service is a good start -and this can be improved (or not) through the legislative process.

    Keep up your good work.

  3. PeterKim says:

    Why allow more municipal plan design authority? Why not get the benefits of economies of scale by having all government employees and elected officials receive the exact same benefits package?

    I will readily admit up front, though, that my knowledge of this issue is not particularly well informed. I just didn’t see WHY you want more municipal control.

  4. Judith Feinleib says:

    Whatever happens, let’s not have this turn into yet another effort to undo collective bargaining. That business has managed to curtail private industry bargaining does not mean it should happen in the public sector. In fact, individuals are not as powerful as either a business or the government.

  5. joeltpatterson says:

    Will, I am troubled by the idea of bringing pensions in line with Social Security because I read this at your link:
    ”As of January 2006, the maximum monthly federal SSI payment for an individual living in his or her own household and with no other countable income is $603…”
    $603 per month? Maximum? $7236 per year?

    Did I misunderstand that?

    • Yes, social security benefits are different from SSI. SSI is supplemental security income for people who don’t get social security. The maximum social security benefit for an individual is just under $30K per yer.

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