Recently read an article on the pro business website “MarketWatch” where one of their columnist was questioning why the pension fund for Police and Firefighters in Detroit was being threatened by the impending bankruptcy proceedings when the Detroit Police and Firefighters Pension Fund was better funded (77%) than most state pension funds (including the MA State Pension Fund). In addition, the Michigan state constitution, like the Massachusetts state constitution, protects public pensions by contract. However, the judge in the Detroit Bankruptcy case has ruled that federal bankruptcy laws have precedence over the Michigan state constitutional guareentes for state pensioners.
Following this line of logic, MA State and Municipal pension funds could also be wiped out if similiar circumstances were to occur here since federal courts have ruled that federal bankruptcy laws have priority over state constitutional guareentes. Therefore, in light of this new ruling, I am requesting that you file legislation in the MA General Court that would transfer all public pension funds to a private trust in order to protect the funds that MA State and Municipal employees have contributed to the MA State Pension Fund as well as contributions made by the Commonwealth on their behalf.
This Private Trust could be governed by a 7 member board: 1 member would be selected by the Governor, 1 member by the State Senate, and another by the House; three more members of the Retirement Board would be selected by retiree and employee organizations and the 7th member would be selected by the other six.
This legislation is necessary to protect pensioners from unforeseen circumstances as well as from so called “reformers” who may intend to raid the pension funds.