Why Maine Needs Public Pension Reform


Maine's Public Pension BombYou might remember back in October 2010 when we added government retiree data to MaineOpenGov.org. It showed some pretty shocking things, like the fact that thousands of government retirees will get more than $1 million in total pension, or that 50% of retirees only work 25 years or less before they retire, and for every $1 that public retirees contribute to their own retirement, they get back $17 on average.

Now the pension conversation is more relevant than ever, because the Legislature is getting ready to vote on a two-year budget that contains major reforms to the public pension system. It’s a good thing too, because, as we have heard loud-and-clear in the months since last October, Maine is on the hook for $4.1 billion that we don’t have, and without the proposed reform to the pension system, we will go broke.

Today, the retiree pensions application on MaineOpenGov.org has been updated to include new data from 2010. The numbers are ugly. If you aren’t yet convinced that the Legislature needs to vote pension reform through, consider these facts:

1) Maine’s public pension system is turning thousands of government retirees into millionaires.

Despite the many cries of poverty from Union bosses, Maine’s public pension system is very, very generous. Take a look at this –  the numbers of government retirees (out of 27,000) who will earn projected lifetime pensions at several different amounts:

Total Projected Pension

(Already Received plus Future Projected Pension)


Number and % of Retirees

$2 million or more 199 (1%)
$1 million or more 5,410 (20%)
$750,000 or more 9,987 (38%)
$500,000 or more 15,178 (57%)


2) The growth in Maine’s taxpayer-funded government pensions is out-of-control, and needs to be reined in now.

As you can see from this chart, the total paid out for Maine government pensions has gone from $156 million in 1991 to $553 million in 2010 – an increase of 235%. This explosive growth in pensions cost is crowding out all other Maine spending, and if we don’t address this issue now, there will be no money left for schools, roads and the truly needy.

Maine Yearly Public Pension Costs
Total Yearly Pension Cost (in millions)

3) 50% of government retirees receiving a pension worked only 25 or fewer years.

No picture needed. How many years do you have to work in the private sector to retire? Will you retire after only 25 years of work?

4) Government retirees pay very little of their own pensions.

Retirees as a whole have paid in just $940 million to the retirement system, and are getting back a whopping $17 billion:


Maine Public Employee Pensions
Maine Government Pensions – Retiree Contributions vs. Total Pension Value

*The Governor’s initial pension reform plan would have had public retirees contribute just 2% more to their own pension. The current reform proposal from the Appropriations Committee removes this provision, but makes up the savings in COLA adjustments.

5) Public pensions are too generous.

Don’t believe me? Check out our new “Public Pension Calculator” to see what your pension would be if you were a government employee. You can plug in your private sector numbers (earnings, years worked, etc…) to see how much you would get to collect.

For instance, if you retired at 60 years old, having work for 35 years, and had a final average salary (the average of your 3 highest earning years) of $45,708 (Maine’s median household income) you would be getting a $31,996 pension each year. And under current law, that would go up every year as much as 4%.

Calculate Your Maine Public Pension

These are just a few reminders of why we need government employee pension reform so badly. The Governor and Legislature’s Appropriations Committee have combined to put a solid proposal on the table that will reel in some of these benefits and start reducing our $4.1 unfunded pension debt.

Let’s hope the full Legislature will pass this badly needed pension reform.