Massachusetts Candidate to propose state pension overhaul

The Boston Globe reports:

Lieutenant Governor Kerry Healey today plans to propose a sweeping overhaul of the state's fragmented public pension system that would eliminate traditional pensions for most new public-sector workers and instead give them corporate-style saving accounts like 401(k) plans.

Healey's proposal would also eliminate Massachusetts' 104 independent public pension systems -- each of which makes its own investment and budget decisions -- and put their money in the state pension trust, which has performed far better than the generally smaller, less professional plans.

Together the steps would eventually produce more than $350 million in investment gains and administrative savings annually, according to an outline of Healey's plan obtained by the Globe. The changes would provide Massachusetts with ``more stable finances," according to the outline, and would help ``attract young, talented individuals" turned off by the current system.

The proposals by Healey, a Republican, could be used in her run for governor in an appeal to voters unhappy with the cost of government. But it could also draw a firestorm of protest from local pension officials and Democrats on Beacon Hill aligned with public-sector labor unions who favor the status quo.

The status quo has quite a deal.