While improvements of any kind are praiseworthy, there are a few pension systems that stand-out for significant progress in reducing their unfunded liability. Here are the public pensions with the largest decreases in unfunded liability over the past several years, according to MassPensions:
- Leominster (100%):
Considering our recent blog on the state’s best and worst performers, it makes sense that Leominster tops the list. In 2013, the fund had a $28.9 million unfunded liability. Since then, the city has eliminated its unfunded pension liability, amounting to a 100% decrease between 2013 and 2019.
- Dedham (77.2%):
Up next is Dedham’s pension system, which achieved a 77.2% decrease between 2012 and 2018. During these six years, the fund reduced its unfunded liability from $33.8 million to $7.7 million.
- Shrewsbury (70.5%):
Following close behind is Shrewsbury, with a 70.5% decrease in unfunded liability between 2012 and 2018. In 2012, this system had an unfunded liability of $33.2 million, yet in just six years it reduced the amount to $9.8 million.
- Watertown (60.1%):
Watertown also makes the list, touting a 60.1% reduction in unfunded liability over five years. Between 2013 and 2018, this fund was able to lower its unfunded liability from $60.6 million to $24.2 million.
In addition, Taunton, the Massachusetts Water Resources Authority, and the Massachusetts Port Authority deserve honorable mention. Taunton reduced its unfunded liability by 37.2% between 2012 and 2018, whereas MWRA and MassPort achieved 36.8% and 33.7% decreases, respectively, between 2013 and 2018.
It is imperative for the state and its communities to review the practices of these pension systems. They demonstrate exceptional progress in curbing unfunded liabilities — progress that pension funds statewide should seek to emulate.
Cole Kroninger is a Roger Perry Transparency Intern at Pioneer Institute. He is a rising senior at Hamilton College where he studies Economics.
