The next step; Don't wait for state pension takeover.
Acknowledging that the "state takeover of the regional retirement system has become inevitable," Michael J. Donoghue yesterday announced his intention to retire as CEO and chairman of the Worcester Regional Retirement System. The retirement system's board should not wait for a state takeover, but voluntarily turn over management of its $400 million fund to the state retirement system, as Newton and many other communities have opted to do.
The regional system manages the retirement nest eggs of 50 Worcester County towns, plus nearly as many school districts, authorities and other public entities.
Mr. Donoghue's decision to retire from the $133,500-a-year position comes as the independent public-employee pension systems are under intense scrutiny.
The Legislature is preparing to enact a Patrick administration measure that would place underperforming pension funds under the management of the entity that manages the state's $48 billion Public Retirement Investment Trust fund. Because of savvy investment policy and economies of scale, the PRIT fund consistently has surpassed all but a few of the 106 other public pension systems in the state.
Lawmakers are still shaping the bill's final form, but it is virtually certain the Worcester regional system would be among those forced into the state system.
The regional board's reluctance to make the move voluntarily is puzzling, because every day of delay means money lost. Economics professor Ken Arden calculates that, conservatively, subpar performance has cost contributors to the Worcester Regional Retirement System at least $80 million over the past decade.
The fact is, the regional board has two options: Join with the state system voluntarily now, or later under duress.
Why wait to be coerced?
With municipalities struggling financially, forgoing investment income the regional system would earn with the state would be a grave affront to taxpayers and to public employees alike.
|Printer friendly Cite/link Email Feedback|
|Publication:||Telegram & Gazette (Worcester, MA)|
|Date:||Jun 27, 2007|
|Previous Article:||Contamination closes Queen Lake beach.|
|Next Article:||Business briefs.|