Pension Liability Grows Drip By Drip
We looked at the cost that pension loopholes and gaming impose on the Commonwealth. Our report concludes that at least $3b of the $13b unfunded pension liability comes from these practices.
The creation of these loopholes happens on a regular basis and here’s a small example that came up in today’s legislative session — House Bill 4024, which allows six individuals to receive credit in the Cambridge Retirement System ($108m unfunded liability as of 2006) for time they spent as mid-wives at Cambridge Health Alliance.
To be clear, I’m a big fan of mid-wives and I’m not sure what the Cambridge Health Alliance is (non-profit? municipal entity? other?). But the point is — the rules of the game should not be changed in the middle. And if you do change them, change them across the board (if you have to specifically name people in legislation, that’s a bad sign) and be transparent about the increased costs associated with the change.