Yet another state has caught the pension bug. This time it’s Massachusetts which is struggling with a raft of underfunded pension programs. An op-ed in the Eagle-Tribune spotlights a Pioneer Institute report which ranks cities and towns according to the health of their pension system, with rather alarming findings. According to the report, nearly one-quarter of all Massachusetts public pension plans have funding rates under 50 percent, while some, like Springfield’s, which is only 29 percent funded, are truly abysmal. This is especially troubling considering that the healthy funding rate for a pension plan is 80 percent, a bar which only 8 of the state’s 105 pensions clear. Overall, the state has $31 billion squared away to meet a total pension obligation of $91 billion.The op-ed goes on to explain how the state got itself in this hole in the first place:
The problem stems from the “promise them anything” mentality of municipal leaders in negotiating labor contracts with public employees. When one set of public employees — the municipal leaders — is negotiating with another set of public employees — the employee unions — who is looking out for taxpayers’ interests?Then, having given away the store at the bargaining table, elected leaders betray the public again by failing to set aside the money necessary to cover the cost of their extravagant promises. Why put away money to cover tomorrow’s problems when there are so many things to spend it on today?
We’ve heard this story before.[Springfield City Hall photo courtesy of Shutterstock]