This post is week late, but I think it’s still worth getting on the record. At last Monday’s Pension Reform Commission meeting, Alicia Munnell staged a robust defense of the Commission’s original intention to be cost-neutral. While a number of the committee members demurred, giving the now shop-worn ‘maybe we need to invest in the system’ defense, she was insistent.
I’ve shared this story with a number of folks. And, to a person, they are dumbfounded. “Cost-neutral?! I thought there would be savings” is a typical response.
But trust me, if you were in that room, you would understand that Professor Munnell is saving this Commission from themselves.
A handful of other observations:
1) Wow, PERAC Executive Director Joe Connarton is really mad. I don’t know all the backstory, but its strange and discomforting to see the leader of the state’s pension oversight commission so openly at odds with the Commission’s chair and vice-chair. And to see him loudly making asides while others are speaking.
2) Everyone seems to support pro-rating group classification in principle, but SRB head Nick Favorito makes a compelling case that this is almost impossible to do administratively across the board. The real issue is that the logic behind the classification system has become blurry through legislative intervention that it’s very difficult to retroactively determine group membership for many employees.
3) It appears that 5 year averaging is probably not going to make it into the final document, in favor of more anti-spiking provisions. This is a disappointment
4) There does appear to be support for capping the amount of salary that gets counted toward the calculation of the pension, which is a good step.
There are plenty more meetings to go this month and next. I’ll keep you posted.