Pension

Recent Stories

King claim about pension funding neglects to tell the full story

In promoting his independent candidacy for U. S. Senate, Angus King claims credit for improving the financial condition of the state’s pension funding during his two terms as governor. The accuracy of the claim, made on his campaign web site, is important because Maine, like most states, has a history of going deep into debt due to poor financial management of the multi-billion-dollar program. The Maine Center for Public Interest Reporting examined the claim for accuracy and completeness, relying primarily on records from the Maine retirement system and legislative studies. The research shows that while the pension system finances improved while King was governor, a major reason wasn’t because of anything he did – it was because he was governor during the stock market’s glory years when the system’s investments went up double digits. King’s use of statistics to make the case for himself have another problem: He counts only the first six years of the governorship, when the pension funding improved, and skips over the final two years, when the funding declined, although it was still better than when he took office. Continue Reading →

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Promise Watch: Did LePage keep campaign commitment on pension costs?

Editor’s note: This is the first in an occasional series examining promises made by Paul LePage when he campaigned for governor in 2010. When he was running for governor, Paul LePage recognized the crisis that could be caused by the $4.3 billion the state owed for the pensions for teachers and state employees. But he didn’t say precisely what he would do about it. He did say what he would not do — cut state government “in half” to find the money. Candidate LePage publicly addressed the pension debt directly, once in a newspaper interview and, later in the campaign in another news interview, but this time through a policy advisor. Continue Reading →

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Pension changes demand a third less of state budget

Editor’s note: This is part 6 of an occasional series on the effects of the state’s pension costs. The series began last July.  

The year is 2020, just nine years from now, and the state is facing one of its worst budget crisis in years. A new governor and legislature are grappling with the inescapable fact that before they can spend a penny on schools, roads or welfare, they have to pay a $760 million bill — almost all of it debt from the past. The bill has come from the Maine pension system. Continue Reading →

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Center’s Christie immersed in public pensions

From last Wednesday night to 2 AM Friday, it was nothing but return on investments, discount rates, defined benefits and unfunded actuarial liabilities. It was everything you ever wanted to know about public pensions — and then some. I spent those days as a fellow at the Society of American Business Editors and Writers conference on public pensions at the Walter Cronkite Center at Arizona State in Phoenix. The 20-plus fellows heard from other journalists who’d been covering the topic, from pension board members, pension administrators and other experts in one of the perhaps driest topics, but also one that threatens almost every state’s budget. The sessions were well-received by everyone because I know I and others picked up at least half a dozen good story ideas that will help our readers understand this crucially important issue. Continue Reading →

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State’s confidential employees’ pension plan costs state ‘extra’ $3 million

PENSIONS: THE NEXT BUDGET CRISIS

Editor’s note: This is the fifth part in a multi-part series about the state’s debt to teachers and state employees for their pensions. AUGUSTA — As state employees and teachers head into a second day of fighting the governor’s proposal to take almost 10 percent out of their paychecks to cover their pensions and pension debt, about 1,200 state employees known as “confidentials” have no such worry. Those employees — mostly in higher pay grades — will put only 3.65 percent of their pay into the retirement system if Gov. Paul LePage’s pension legislation is approved. This would continue the longstanding gap that goes back to 1981 between regular state employees and the confidentials. Confidential employees are defined as state employees not eligible for collective bargaining because they are either in high-level, policymaking jobs or they are involved in union contract negotiations. Continue Reading →

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Governor’s race: pension ‘time bomb’ missing in action from candidates’ platforms

Editor’s note: This is the fourth part in a multi-part series. A widely-respected think tank calls the $4.2 billion that taxpayers owe to Maine’s retirement system a “ticking time bomb” that should dominate any discussion of the state’s finances. The assessment by the nonpartisan Envision Maine is echoed by experts in state finances. Robert A. G. Monks, the Cape Elizabeth resident who chaired two definitive studies of the retirement system, said the next governor will have to perform “triage” on the state’s competing needs and “dilute drastically” many programs to offset the pension expense. Yet, most of the candidates for governor — one of whom will have to solve the problem — have treated it as a side issue, at best. Continue Reading →

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Voters locked up pension ‘cookie jar;’ now jar needs more money

Pensions: The next budget crisis: Part 3

Editor’s note: This is the third part in a multi-part series to be published between now and November about the state’s debt to teachers and state employees for their pensions and retiree health care. In 1995, fed up with the state failure’s to adequately fund its pension system, critics came up with the ultimate solution. They proposed not only making it against the law not to fund the pensions — but against Maine’s law of the land: the state constitution. Groups representing the employees and teachers, backed by Democratic supporters, came up a plan that ultimately became Article IX, section 18A-18B of the Maine Constitution. On June 23, 1995, Rep. John Tuttle, D-Sanford, rose from the floor of the House and explained in layman’s terms what the proposed amendment would do:

“The Legislature is constantly saying that they are no longer going to balance the budget with gimmicks ….” he said. Continue Reading →

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‘Someone else’s liability’ behind $4 billion pension debt

Pensions: The next budget crisis: Part 2

Editor’s note: This is the second part in a multi-part series to be published between now and November about the state’s debt to teachers and state employees for their pensions and retiree health care. How does a state of only 1.3 million people end up $4.4 billion behind in its payments for just one state program? It doesn’t pay its bills on time, makes promises without knowing the costs, loses money in the stock market and ignores repeated warnings that the debt is getting worse by the year. The official name of the debt is the unfunded actuarial liability, and the program is the pension for Maine state employees and public school teachers. The $4.4 billion represents $3,385 in debt for every man, woman and child in the state. Continue Reading →

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Looming bill for pensions will command larger share of taxes paid to state

PENSIONS: THE NEXT BUDGET CRISIS
Editor’s note: This is the first part in a multi-part series to be published between now and November about the state’s debt to teachers and state employees for their pensions and retiree health care. Within a few years, the state’s ability pay for its daily operations and invest in its future will be threatened by an obscure budget item that doesn’t pave a road, aid the needy, imprison a criminal or help a Maine kid pay for college. That line in the state budget pays for the pensions for state employee and public school teachers. It’s already eating up one of every 10 taxpayer dollars — and it’s going to get much worse in just a few years. Using data provided by state agencies, a Maine Center for Public Interest Reporting analysis shows within five to six years pension costs could be 20 percent of the budget — twice, for example, what the state gives to higher education, a system with 14 campuses, 50,000 students and almost 6,000 employees. Continue Reading →

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