The right move; Public employees to benefit from pension vote.
County Retirement Board properly has decided to place public employees' retirement funds under state management. The next task will be to take full advantage of the move by making appropriate staff reductions and off-loading administrative and consulting costs that have tended to depress the fund's rate of return.
The county pension system handles $400 million in funds for nearly 9,000 public employees and retirees in 50 municipalities and 45 districts and authorities. It is among the independent pension systems that would be forced by legislation into the $50 billion PRIT fund, which has outperformed all but a handful of the independent systems statewide.
The voluntary move leaves the option of withdrawing from PRIT after five years, although it is hard to imagine what eventuality might prompt such a reversal.
The county retirement board's work is not entirely finished.
Still on the to-do list is moving into the PRIT fund about $30 million that acting administrator Roger P. Dubois said cannot be liquidated now without incurring penalties. If the investments at issue yield low returns, it might prove to be financially advantageous to incur the penalties and move the money into the high-performing PRIT fund without delay.
Meanwhile, the county system no longer needs a $70,000-a-year investment consultant. That expense and others associated with investment policy should be ended, sooner rather than later.
The board also needs to take a hard look at personnel needs. A downsized staff, with a chief clerk or office manager reporting to the board, should be ample to handle disbursement of pension funds to retirees. There's certainly no need to hire another $133,500-a-year executive director or CEO.
Explaining Friday's vote, Mr. Dubois said the move to the PRIT fund was "the best thing for our members at this time." He's right. The decision to move the funds into PRIT rather than waiting to be forced to do so is commendable.
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|Publication:||Telegram & Gazette (Worcester, MA)|
|Date:||Jul 19, 2007|
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