Monday, September 27, 2010

Public Pensions and Why we Need Them Reformed

     The many are now the few that are asked to be paying for the public pensions of state and city workers. 
At least three North Shore superintendents have reworked their contracts so more of their pay will count toward their pensions.
Essex Aggie's Roger Bourgeois, Marblehead's Paul Dulac and Salem's William Cameron did away with extras, instead accepting thousands of dollars more in their salaries.
The 2009 reform law made considerable changes to how pensions are calculated, most notably, eliminating counting perks like annuities, disability insurance and housing allotments in state workers' pensions.
"Once you put it into the pension system ... that has to be picked up by the taxpayer," said Essex Agricultural and Technical High trustee Vincent Basile, who opposed increasing Bourgeois' salary.
The trustees nixed Bourgeois' $15,000 annuity and used the money, plus a 3 percent raise, to push his salary up to nearly $152,000.
An annuity is a tax-deferred fund that lets superintendents save extra money for retirement beyond what they will get in their public pensions. Thomas Scott, executive director of the Massachusetts Association of School Superintendents, estimated that about half of the superintendents in the state receive an annuity, $10,000 on average, as part of their pay.
But rolling annuities into salaries so the money counts toward pensions just doesn't make sense in this economy, according to Basile. He said only he and fellow trustee Dan Bennett opposed Bourgeois' raise, and it had nothing to do with job performance.
"I just didn't feel it was a benefit to the commonwealth," he said.
When Cameron negotiated his latest contract, he eliminated his $2,500 annuity and $1,700 disability insurance, neither of which could any longer be factored into pensions.
Rather, he took a higher base, including a raise, which moved him from $133,000 to $156,000, according to Cameron.
The superintendent noted that he did not take a raise for years, and $6,000 of the increase reflected work he does filling in for a position that was eliminated.
"In negotiations with the School Committee, I took into account what would or wouldn't be pensionable," Cameron said.
Last year, Marblehead Superintendent Paul Dulac renegotiated his existing contract to lump $12,600 in benefits into final pay, according to his contract provided by the town. His total compensation is $181,080.
Multiple messages left for Dulac were not returned by press time.

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