Finegold: Why I Voted for Pension Reform

This press release was provided by the office state Sen. Barry Finegold, D-Andover.

I voted to reform our pension system because in difficult times, you have to be willing to make tough choices, and these tough choices can be unpopular.

Massachusetts is one of 25 states across the country that has enacted significant pension reforms this year. We are not the only ones scaling back and reevaluating our fiscal situation. Every aspect of retirement needs to be examined, including life expectancy.

When Social Security was created, the average life expectancy for men was 58 and 62 for women. The retirement age was still 65. Back then, there were 40 workers supporting each Social Security retiree. Now’s there’s about 3. These numbers are analogous to the state pension system; it wasn’t built to sustain this large number of people for this extended period of time at such a great cost.

There are more than 175,000 active members in our state and teachers pension system. But there are also 107,578 retired members collecting pension payments. That means there are roughly 1.6 active workers for each retiree. The numbers can’t support the system we have in place right now.

I believe asking future employees to work longer is a necessary measure that will keep the system functioning. If you ask a young person now, many do not believe their pension or Social Security will even be available for them when they reach retirement age.

Reform is necessary for the betterment of the future state employees as well as for all the taxpayers of Massachusetts.  Right now, on average, the state contributes about 2.7 percent per state employee for the pension fund. Under Social Security, private sector employers are mandated to pay 6.25 percent.  If the state had to pay for Social Security for all state workers, it would cost more than $365 million per year more than what the state contributes now to the pension system. It’s simply a better deal for the state as whole to keep the current system than replace it with Social Security.

Pointing fingers at what should have been done in the past does not solve problems. It does not matter who was the root cause of the unfunded liability for pensions, but rather more important that we address it and make sure it doesn’t happen again for future generations.  We have to confront the issues and make bold choices. Scapegoating government employees will also not solve problems. I saw firsthand how dedicated and how hard my parents worked as teachers. I still have people come up to me today to tell me what an impact my parents had on their lives. People choose public service because they want to help people. I think they deserve a decent retirement when they are done with their careers.  In order for that to happen, we all have to be willing to change the status quo, not hide behind it.