Go Newton Go
A year ago, Pioneer released a report that put the cost of local pension fund underperformance at $1.6 billion over the past 10 years. We recommended folding all underperforming funds into the state pension fund.
Some people appeared to notice, the Governor has put forward a less muscular version of this reform in his Municipal Partnership Act.
Now Newton is jumping on board, with plans to roll the assets of its pension fund into the state system. We estimate that Newton has left $20 million on the table, in underperformance, over the last ten years.
In the Globe article on Newton’s move, there are two quotes from officials in other cities defending their current practices:
“Recently they’ve done very well,” said Richard Fitzpatrick, city auditor in Quincy, which manages most of its own pension fund but has a small percentage invested with the state. “But we have looked at their performance and don’t see since the beginning of time that the state is that much more ahead of us.”
In the last 10 years, the cost of Quincy’s underperformance has been over $20 million dollars.
“We’re doing all right now,” said Robert Tierney, executive officer of the Boston Retirement Board, which manages its own money.
In the last 10 years, the cost of Boston’s underperformance has been over $400 million dollars.
I guess the definitions of “that much more” and “all right” all depend on who’s paying.