Five Facts About Maine Government Pensions
The launch of new government pension data on MaineOpenGov.org gives us a wealth of information to consider. It is especially important because the next governor and legislature have to try and wrap their collective heads around a pension crisis that runs in the billions of dollars (yeah, that’s billions with a b).
The current pension crisis is a big deal. Bachman-Turner Overdrive said it best, and our economist Scott Moody just pointed out – “You Ain’t Seen Nothin Yet.”
The impending retirement boom aside, for now let’s take a look at some of the key findings that come out of the pension data for the 25,727 current government retirees here in Maine.
Fact 1) There are thousands of retirees who will receive millions of dollars from their pensions.
Total Lifetime Pension Benefits
(Already Received plus Future Projected Pension) |
Number and % of Retirees |
$2 million or more | 153 (1%) |
$1 million or more | 4,369 (17%) |
$750,000 or more | 8,632 (34%) |
$500,000 or more | 13,618 (53%) |
Fact 2) The growth in Maine’s taxpayer-funded government pensions over the past two decades has been dramatic. As you can see from this chart, the total paid out for Maine government pensions has gone from $156 million in 1991 to $516 million in 2009:
Fact 3) 50% of government retirees receiving a pension worked for 25 or fewer years. You can see that from the chart below:
Fact 4) Retirees as a whole have paid in just under $900 million to the retirement system, and are getting back a whopping $15.4 billion:
Fact 5) The taxpayer is on the hook to fund these government pensions. And it is a big check the taxpayer will have write. The $15.4 billion equals to $11,834 for every man, woman and child in the State of Maine.
Facts don’t lie. This is an expensive pension system. It’s billions of dollars per budget that the taxpayer is on the hook for, and we’ve got to do something about it, and soon. It will be a huge challenge for the next governor and legislature.
It’s time for Maine to start “Takin Care of Business” and get this pension crisis straightened out and finally get the taxpayer some tax relief.
Will Payson
Posted on Nov 02, 2010
This is not some sudden NEWS!! I recall clearly this financial crisis coming our way when I was the Northeast Regional Pension Manager for Unum prior to 1959!! Our in-house actuaries had viewed the Unfunded Liability of the State Pension Fund several times and as I recall there was concern at that earlier time as to the actuarial forcasts recognizing reasonable assumptions (Interest, mortality,morbidity, expenses) and thus this current unfunded Liability that you dramatise for the media and layman to understand is alot of hype and does not tell the entire truth!! What bothers me is the fact the writer of this reporting may also know they are not being totally honest-just exciting!!!!! This is not a simple subject to explain and this is what bothers me. The question is the strength or weakness of the data and assumptions?? Are they Conservative or Realistic? a simple adjustment in the actuarial interest assumption and everything changes as to the magnitude of your report!! There's alot more as well!! Respectfully. Will Payson
KEN COVILLE
Posted on Nov 04, 2010
Mr. Payson is correct in pointing out that the data presentation is somewhat hyperbolic and dramatized. However this may be a good thing given general apathy and inertia against resolving such long term financial issues. One aspect of concern in the presentation is the demonization of the individuals scheduled to recieve benefits. The statement "Retirees as a whole have paid in just under $900 million to the retirement system, and are getting back a whopping $15.4 billion" is both inflamatory and misleading. First of course the employees had no control over what their contribution was. This was set by law. Secondly the report does not include the corresponding "employer contributions" made for these employees. Third the report leaves out the earnings on the combined employee and employer contributions that have acrued over the contributing periods for all these employees. The selective presentation of only part of the pertinent information on an issue is far from the transparency which this site purports to promote. While it is true as stated in the article that "Facts don't lie" it is also true that facts can be misrepresented. Both the public employees and the taxpayers of Maine deserve a full and unbiased approach to the resolution of the pension issue.
Bob Digger
Posted on Nov 07, 2010
In reading your "facts" about the Maine State pension fund it seems that your plan for balancing the State budget is to rob the Maine State Retirement fund. Money which was deducted from Maine State employees much the same as payroll taxes and invested in the stock market and other sources to create the fund. Is this is your think tank plan to restore good government? It sure sounds that what you think is wrong with State Government is State employees and their pension money which seems rather short sighted at best. What about the future when the pension money runs out? I really don't see this attack on the Maine State pension fund as much different than an attack by marauding Vikings on villages in England and Ireland in 9th century. Looks like the same motive as well.
Lucy C
Posted on Nov 07, 2010
the dark cloud on the horizon is inflation, tainting all plans and forward thinking. what is the value of things? gloomy feelings here Gov. Lepage's greatest challenge, come january 5.
Margaret Maxwell
Posted on Jul 25, 2011
Why did the investors in our pensions make such errors in investing our money and their contributions in such volatile funds? I remember our rating change in the 90's; that should have been the first red flag. Now we are expected to pay the bill. There are retired teachers collecting welfare. Perhaps the welfare benefits are being re-evaluated because there will be more retired professionals eligible. It is about time the teacher's pension plan; one of the largest bank accounts in the state; stop being used as an investing agent with poor outcomes.