Globe editorial

How pensions go awry

May 10, 2009
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EVEN AS public ire rises over pension abuses by public officials, the Legislature's Joint Committee on Public Service is littered with special bills that would make the problem worse. The state pension system divides workers into four tiers, which in theory reflect how risky and physically demanding their jobs are. But in every session, there are attempts to slip individuals or entire groups of workers into more generous pension tiers. If successful, these efforts can cost taxpayers plenty.

Part of the effort to reform the pension system must focus on bringing clarity and consistency to the tier system, which determines when workers can retire and how much pension they receive.

Reclassification requests are as common as mud. A few current examples:

Saugus Representative Mark Falzone filed a bill that would move maintenance workers at higher-education institutions from tier 1, which is occupied by office and technical workers, into the tier 2 category, reserved for workers at higher risk, such as mental health aides in state hospitals. Another Falzone bill would elevate tier 2 mechanics at the state Department of Conservation and Recreation to tier 4, which is normally reserved for police officers and firefighters. The changes can add up. A 2006 blue ribbon commission on pension reform found that tier 4 personnel retire at a median age of 53 with an annual $32,814 benefit. Tier 1 workers, by contrast, retire at 60 with a $19,691 benefit.

Representative Stephen Canessa of New Bedford wants to upgrade some court workers, including psychologists and interpreters, from tier 1 to tier 2.

Representative Jennifer Callahan of Sutton has a bill to move municipal fire chemists, who conduct tests and respond to some emergencies, from tier 2 to tier 4.

In some cases, the representatives believe the proposed changes have merit. In others, they are filing bills as a courtesy for constituents exercising the right of free petition open to any Massachusetts citizen. But in no case should these potentially costly bills be taken up by the Legislature before a major overhaul of the state's pension system.

Representative Jay Kaufman of Lexington, the former chairman of the Public Service Committee, set a high bar for reclassification bills by insisting they include a price tag showing the impact on the retirement system's unfunded liability. Representative Robert Spellane of Worcester, the new chairman, appears to be taking the same sensible approach to the 72 reclassification bills now crowding his desk. Spellane says he has no intention of moving the bills forward in the current legislative session. Better still, Spellane says he is "open to an absolute overhaul of the group classification system."

At this point, there is little logic to which job titles end up in which tier. Recognizing this, the 2006 blue ribbon commission on pension reform recommended several ways to fix the system. The best idea was collapsing the system into just two tiers. Police, firefighters, and corrections officers - who face the kinds of physical dangers and exertions that shorten their careers - would be put in one tier. Their earlier and higher retirement benefits would be offset by higher contributions to their retirement funds. All other public-sector workers who could expect to be on the job productively until age 65 would be put in the lower tier.

Governor Patrick's new task force on pension reform should take up this challenge. Decisions about retirement, by workers and employers alike, depend on facts about workplace safety and life expectancy - facts that evolve over time. Meanwhile, the state pension classification system seems stuck in prehistoric ooze.

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