In addition to pensions, the Commonwealth of Massachusetts and its municipalities also provide their retirees with other post-employment benefits (OPEB), mostly in the form of retiree healthcare and life insurance. While these benefits have existed for many decades, the programs have not been sufficiently funded. As of June 2016, the best estimate is that the promised benefits are unfunded by $46.7 billion statewide. Public employees who reach 10 years of service are entitled to receive a predefined set of benefits upon retirement. State retirees are entitled to life insurance and 80 percent of their healthcare costs from retirement to age 65, at which point they are transitioned to Medicare. At age 65, jurisdictions also subsidize supplemental Medicare coverage. The state […]
About Josh Beck
Josh Beck is a rising junior at Brown University studying computer science and economics. At pioneer, he has been focusing on public finances.
Entries by Josh Beck
There are numerous expert opinion on the proper investment strategy for public pension funds. In 2012, the Pioneer Institute’s Ilya Atanasov cited concerns about risk and subpar returns in recommending that public pension funds divest from certain complex alternative including private equity and hedge funds. Instead, Atanasov suggested funds invest in safer, more stable assets such as fixed income securities and even holding some portion of assets in gold and cash-equivalents as a hedge against market volatility. Today, private equity and other alternative investments constitute an ever-larger portion of asset portfolios. Hedge funds and private equity as of March 2017 make up 19.2% of the Pension Reserves Investment Trust (PRIT), which manages assets for Massachusetts state pensions. This is a […]
On June 30th, two days before it was scheduled to go into effect, the Massachusetts Department of Revenue (DOR) pulled a directive that would tax online retailers without a physical presence in the state. Under the directive, any company that has over 100 transactions and at least $500,000 in sales in the state in the prior year would be subject to a 6.25% sales tax. An internet sales tax is not, however, as easy to implement as it sounds. In 1992 the Supreme Court ruled in Quill Corporation v. North Dakota that that states could not levy taxes on businesses unless they had a physical presence in the state in which they were being taxed. To get around the ruling, […]
Since the end of the Great Recession in 2009, economic indicators have been largely positive. The U.S. GDP in 2015 reached $16.3 trillion, finally surpassing the $16 trillion before the recession. U.S. unemployment has fallen to 4.3%, down from 10% at the height of the recession. Yet despite the recent growth, 13 states including Massachusetts have seen bond rating downgrades from at least one rating agency in the past two years. Five states have suffered downgrades from all three. Their stories should serve as a warning to Massachusetts not to follow in their footsteps. Bond ratings measure the risk that an entity will be unable to pay back its bond holders. As bonds get riskier, bond issuers are forced to […]
Just recently Kathy Curran led an investigation into Massachusetts retirement boards’ wasteful use of public funds. Her investigative team found that while nearly all public retirement boards in Massachusetts are not on track to be fully funded for at least another decade, numerous boards have been treating themselves to expensive dinners, five-star hotel visits, and other indulgences paid for on the public’s dime. In the past, it has been challenging for the public to assess and compare the finances of their local retirement board to other such boards. It would take countless hours to comb through the hundred or so page financial statements in order to identify a trend that would point to potential excesses or mismanagement, never mind doing so […]