The author of this article is David S. Wakelin a former chairman of the Maine Public Employees Retirement System Board of Trustees.
I have listened with great interest as Gov. Paul LePage and Maine Treasurer Bruce Poliquin have whipped up anxiety about the alleged "crisis" facing the Maine Public Employees Retirement System.
As a pension lawyer from South Portland who has spent the last 24 years building and protecting the retirement system, first as a member of the so-called Monks Commission in 1987, and then as a member of the Retirement System Board of Trustees from 1988 to 2008, and chair of that board from 1993 to 2007, I feel compelled to respond to some of the erroneous information being bandied about over the past few weeks.
First, Maine does not have a pension funding "crisis." Second, it is not necessary to substantially reduce participant and retiree benefits to address the problem that does exist. The system is over 70 percent funded. The UAL liability today is far less than it was in l987 in inflation-adjusted dollars.
Some have alleged that Maine teachers and state employees are overpaid and have too-rich benefits. I respectfully submit that this is also incorrect. When their compensation and benefits are compared to the private sector on an education-adjusted basis, they are below private sector salaries and benefits. In fact, Maine state employees with a college degree tend to earn 15 percent less than their private sector counterparts, a fact which the governor himself bemoaned as he tried to fill his cabinet.
It is critical to remember that Maine teachers and state employees receive their Maine pension instead of Social Security. Thus, their benefits need to be compared to the total retirement benefits that private sector employees receive from both Social Security and their 401(k) plans.
The sky is not falling, so we should not allow the alarmist rhetoric that has been used by some to cloud our decisions. The current rhetoric is simply a distortion of the facts.