Healey, the presumptive Republican gubernatorial nominee, is making reforming state and local government pensions a key part her campaign. She's proposing that all municipal governments in Massachusetts merge their pension systems into one state fund and that most new employees be given 401(k)-style defined-contribution plans, instead of defined-benefit plans.
Governing has written quite a bit about employee retirement benefits (see here and here) and the issue has been an important one for policymakers, but that hasn't translated into widespread political relevance.
If that were ever going to change, now would be the time.
That's because many states face unfunded liabilities in the billions of dollars for both health care and pensions (in Massachusetts it's $13 billion). Plus, new accounting rules will require governments to disclose their health care liabilities, meaning places that aren't on solid footing could face the immediate consequence of worsening bond ratings.
However, even now don't expect retirement benefits to become a hot-button issue -- and not just because the phrase "unfunded long-term public employee pension liabilities" is enough to make the average voter's eyes to glaze over.
Democrats aren't especially eager to bring up the subject on the campaign trail, given that most of the proposed fixes run afoul of the public employee unions who are among their key supporters. And Republicans? It's not easy to say that the state is going to be the hook for billions of dollars in retirement benefits in one sentence and that it can afford tax cuts in the next.
