Rep. Jay Kaufman pension reform

Thank you for joining us. Are kind of set it all the headline was a retirement -- gone wild. And it talked about the public has seen enough and had quite enough of these pension. You know loopholes. Pension provisions. That get the -- get the regular public agitated in that editorial that was very praiseworthy. Of us somewhere Cuba don't -- Sponsor legislation that would close off. Some of the more notorious. Provision to tell us a little bit about the work you've been doing these last couple years on it and what you expect. Out of your colleagues in the legislature can't they will they rise the occasion on these topics.

Well -- Very quickly there's been a whole series of things have been doing over the last four years and I'm not alone I've had some wonderful support and help from not only that house and Senate Leadership but members of the house and senate as well. So I'm very optimistic that we will we already have some significant reform and I think we -- we are poised to do much more of that in the next couple of months. And that doesn't mean -- a 100% vote. The proposals that we have some of them fairly radical. I would be very happy with 81 votes in the house and 21 in the Senate we don't need unanimous support of these but I I am. Confidence. That we will be able to keep moving along this along the --

Can you lay it out for us what what do you propose to. Fix some of these conditions that have been causing alarm.

Article in yesterday's over the editorial in yesterday's -- specifically search to the oversight. Of -- 106 independence retirement boards that we have. For historical reasons we have a situation here this almost unique in the country of having a lot of independent retirement systems. And what has gone on over the last couple years is that many of them have really gone off -- room and the agency that's post an oversight over the has not had. The proper authority to deal with that. Sort of legislation that was referred to in the publicity specifically. Brings into alignment the power of that agency -- its responsibility. Even before doing that we've already. Last term. We enacted a very significant. Oversight. -- those independent agencies by requiring that they -- two tests. And if they fail to meet goes to test that is if their performance is not good enough the assets are actually assumed by the the statewide agency that handles pensions.

And the statewide agency. Has a reputation for credibility. Avoidance of conflict of interest. Stood you know judicious selection of investment advises the type things that you know I think taught by. In every adolescent I was would be assuming his as basic that's what the state. Oversight group does.

Does that nitrates -- the top of that -- the public employees retirement administration commission. I have to do indeed this is just don't have it exquisite. Reputation. And they have been pushing this legislation they they want to do their --

How about getting rid of pensions for all future workers is now or we want to go to have to have vowed to match the trend in the country away from pension obligations.

You don't have -- most people in employment in employed in the country today a pension from many of them is what's called Social Security system you have the Social Security system. Our public employees in Massachusetts as well as in about fifteen other states. Do not.

You know why is that why not just let them do the Social Security thing and have 401K is like everybody else well week.

We've been tried one of the reforms that we have been trying to insist. Would do just that that is that would that would make us eligible for Social Security which went to debate you becomes a completely different one. That is just a -- that's subject to congressional action and has failed over the years we we haven't tried again this term. To push our own delegation to Washington to push their colleagues in the house and senate there. To move that --

So -- it -- illegal for new workers of cities and towns in the state to be in the Social Security system.

So so much that it's illegal but there's a claw back provisions so that if when we retire if we're collecting from the state pension system that amount is deducted from Social Security eligibility. So we can't have both.

Kind of plot that's the kind of boat wasn't cannot -- you Kenya which is the offset what's wrong with that.

If you are suggesting getting rid of the state retirement system we first have to be eligible for Social Security which is going to require some federal election. And any of -- advertising that you're suggesting might be something that we can consider prospect of the that is going forward. For those. Those who are already retired and those of us who are in the retirement system now that provides some kind of retirement for the.

Right but the first step would veto it to put up a wall and say from this point forward. For a one can remove an end right or -- okay science Social Security net you -- not -- on Social Security you're just you're just saying there -- being offset. From any benefits there receiving in the state system.

Well one of the things in place now to look at these kinds of reforms both radical and more -- a technical. Is special commission on pensions that will be beginning -- process very shortly. I I would assume that all ideas included network.

Do you exploited otherwise it is that a no brainer idea let's get rid of these things. That caused problems.

It's that it is in my experience looking at these things over the last four years -- and by no means the world greatest expert of this. There is no such thing as a no brainer in this business everything has consequences and many of them unintended consequences so I don't want to weigh in on that right now since I just don't know.

Jake let me ask if there are two issues have come up recently was seen evidence of them the public goes ballistic about it we look Todd and I look at each other kind of -- by hands. The opportunity to. May be serve you know a couple of days a couple of weeks even a couple of months into into a year and then. You retiree go off and the privates -- to do something else and you get forty is worth a credit for a essentially a couple of day as a couple weeks. Maybe within the first several days of becoming speaker said look. Those two things are gonna go and there's a lot of other stuff that's gonna go. We're serious about I'm encouraged to hear at what she has sense of the members reaction to the speakers. Really bold statements.

Well again I think a majority of us are enthusiastically. Behind him on this the bill Linda Cristina worried. Who was the vice chair of the committee on public service over the last term. Headed up committee's subcommittee that looked at these kinds of abuses. And crafted. What I think is very wonderful comprehensive bill. Which is some topic pocket as far as I'm concerned those.

From -- and know how to do -- don't think absolutely DeForest my success. Fees she was elected that she knows her stuff she knows -- I think it.

You know there are there are some members who I certainly can -- I think in any institution. And in her own personal exchange is -- was somewhat threatening I would difficult some of must do better with change and others. There will be there are those who resistant. I don't think it will be majority of us.

Representative -- Kaufman isn't with us from Lexington working on legislation to reform the pension system in the -- so in terms of the problems -- said. The independent retirement boards. Are a problem.

Picked -- from the fearless about now because of the fact that. We can't take them over -- they are underperforming.

I was the legislation you did last year.

And introduced by the governor. To discredit and it's we enacted two tests one is whether their performance. Is adequate that is their incumbents they're able to reduce its strategy is is working. And with that they are able to pay down there they're for retirement allowances for the future is as you know all retirement systems. Not all but most retirement systems are underfunded and under federal mandate we've tried to. But does that underfunding so each of those boards is closest state forward as a responsibility to to fill in those gaps and some fortunately better than others.

6172666868. And two other top.

One was a big part of the government the other one just like stood -- big government -- partners -- I'm fine -- on Boston's talks. -- and AM six -- W or Kerio.

Welcome back Tom Finneran and Todd Feinberg -- listening to AM 680 WRKO and I guess is state representative jay Kaufman. Leading the chats on what you're saying he would do. Talisman note Jason Jake it's I can always I'm telling you maggots are Rolen to get your -- the other stuff like Jake. Half let me slow enough -- it's jay -- thank you from Democrat from Lexington. Yeah I I know ha ha -- The public the general public he has watched. And guys going out on retirement at the age of forty somethin'. How by how might view the speaker and others up there address that issue in the coming session.

Offered by react the same way I think some of the provisions the retirement provisions in the independent authority or -- like -- public authorities. I'm absolutely. Get my -- up at very least if my as -- here's that here's the trick with those as you know as well as anybody. BT. In February Massport other organizations and -- sort was set up to be somewhat independent. In order to be able to go out into the bond market and response. Were we to do anything to. Compromised their independence and I do think. I -- think we don't need to do that. We will also be compromising. Their ability to go out into the bond market and potentially compromise. Their their rates -- bond rates. So we just approach that with a sense of responsibility that doesn't mean don't approach it just means. Note that we may be assuming some responsibility for their dead or for their future debt. If we go and try to fix what is obviously has serious problems so handling those is going to be a little bit different than fixing the rest of public pensions.

Well -- know you'd be in bold on some -- Amanda Todd and I and I think I'll listen is about to encourage you to be bold on all fronts let's go to those college Tony. Is calling from the -- Tony good morning -- with representative jay Kaufman.

Good morning Tony Tony but it backfired interest thing is that. So security system. Does not change him out of the benefit based on how much you make. So your question do talk earlier was that I'd hate you do have a defined benefits program. Which supplements you're part of program beat oral one -- today what that source security. Is totally blind fury -- Pictures up three your last three years. And get a tremendous kick your. Benefit pension. My suggestion would be is that model at least depths of security where are used today okay. No matter how much you pay and it's basically going to our benefit as well. For -- security works what you need a fairly minimum threshold. And that's the biggest bank is that he's incredibly huge and you see he put what eight. -- Lifestyle which they were constant. As opposed to -- people or say or practice supplement Social Security.

And anyway and worse than that Tony goes beyond it to where there are special things passed to allow people to game the system. -- and both of the both interesting question for the let's give their right to Jennifer response JD you're the --

Tony -- great -- let me speak to. I think one of the underlying. Challenges that we're going to face argue I think accurately referred to what happens when somebody just lose their pension up with three last years -- a very hard eight. We actually proposed. Two ways of dealing with that one mister -- The amount of money that can be added to the pension system in those last years. Essentially to seriously. Compromise. That three year highest. Protocol that we had over the years. In addition to that the special commission. On pensions is going to be looking at a recommendation made by a panel a couple of years ago. To actually have our pensions based on a program out of bases on how much we earned during.

Campbell so it's a blended as opposed to be in -- put on steroids in the past three years. -- and how about how about the -- going into the new year for few days will that be eliminated.

And that that is one of the major provisions of the bill that would absolutely eliminate that that I can't say with absolute certainty. That we will passive I would be shocked if we did.

How about going to meeting once a year for your your library board in in your town with a -- go to. That is not covered in the -- A little amend oh that's. But but he put that lead just that we propose an amendment.

Nero that's that it might go to -- the -- it's not like Lexington -- team and upper deck is -- from Lexington to jetBlue by the -- grew up the let's.

the invention since -- a booklet in Lexington or at least some Lexington connections. One of the proposals it has been made this is simply eliminate these 106 independent boards and -- I'm sure it's such a good -- because they actually believe in competition. And there's some boards including its engines and well pleases which -- that come to mind that it outperformed the state board. And I think -- a performance standards place in our series but the -- have some. Oversight make sure that the ethics -- places that the people who were involved qualified. And they have their own public disclosure of their own HS policy do that title but little cup.

I love the idea or competition I'd I think I'd like yeah development Lexington Wellesley you know what else I I think OJ is a dual what I think is fully fund that I think they've been pretty serious and sober for memory is out -- let's go to -- is calling from -- good morning your idea with representative jay Kaufman.

I maturities to -- these blow it every name in the book here but that's okay. -- we love you anyway we get it blocked and a big idea.

I have a question you mentioned earlier mr. but about your under finding -- detentions yes. I want to know if it's underfunded and make that up into the taxpayer that make up a lot -- Especially and it goes back following up on the left collar about you know I'm -- I'm -- of an average tension over the light there aren't career sound great. But my concern lies -- who make up the difference that it's the taxpayer. Who can't make up the difference and I were like -- what is -- out about my -- like it -- work eat talk about the security being guided by patients and I've. Part of that why is that bad ice cap the body it's. Are these should all be union pension and I look at GE parent. All these big car dealerships that our attention that are underfunded they need -- big payment that make. It I am hi. I worked for a private industry pay 20% of my aunt Sharon. I -- security. And I -- why don't retire maybe I'm gonna get screwed in the long run but some. Some guy I'm on a Beacon Hill wherever they are going to I've got to make up their contention -- did that teachers. Union these -- these.

Please let me ask you about Korea for a minute treats -- a number of good place I want to give -- a chance to restaurant -- try to get -- countries want to give.

Personal Patrice and hear your anger and frustration much like an address that but that we try to address the music you Sarah do you Sheraton. On some level -- typically I would want to make sure that everybody understands. The average pension. In of public employees who retire is about 23000 dollars. Some people may consider -- generous I don't consider that a king's ransom. After lifetime working in any.

And what you compared to Social Security though that's a lot better than Social Security is an.

it's not actually where we -- where are at a cost of living. System to be comparable to social securities we would be dramatically higher than that we have. Among other things we don't have them anything close to a normal social secure elements -- cost of living increase -- here.

You moved so I I don't think people again too grand a month and a Social Security checks.

That people are -- considerably more we have a proposal which actually -- they are. System to Social Security in that regard and I assure you public employees would be ecstatic will be able to do that because it -- closest we've looked more closely matched what.

What's your gonna be let's say okay ecstasy would be match probably buy an anger of taxpayers who would be funding that -- would get back to depressed we'll know about anybody then it's a no brainer to to get everybody into Social Security. But go ahead to.

Patrice raised the point about the unfunded liability. It's actually to the taxpayers avenue. We we are all paying us taxpayers. To address that unfunded liability however we as taxpayers have benefited from the fact that legislature over the years has not put money into. The retirement system that it ought to.

how -- we benefit from that. What you 'cause the money would -- would have been much much -- if you -- funny after the fact his remarks sense -- well that's that's one of the reasons why the legislature I don't mean to speak legitimately varsity guys did you have been pretty damn serious about keeping to us -- sober responsible funding schedule for the past I would say 1520 straight but it.

About twenty years and -- that we are basically now paying for the failure of our predecessors to do what they -- and is it is immoral lives. We are getting -- for having waited. Of course you always do so ultimately did so that is -- about -- It's always wanted to pay up front which is precisely why. -- another special commission that met last year. Took a look at unfunded liability for health care costs for future retirees. And we have. Established particle that would have us see pay that down now on saving about seven billion dollars to future.

Why do we have consistency. Guy that's what I want to know this is -- that is going to be that 211 of two ways to pursue this new employees are gonna have to probably pay instant I don't know how you law go to the field corner for a one case forget this four let's let's go to dawn Obama -- I -- this I.

I have more radical proposal for -- of that -- and it seems to me that it makes absolutely no sense in this day and age. For our health care system to be tied to employment -- Sixty years ago when that system was first -- seven years ago without his first established we go into a job. Probably retired from the job after fifty years. And it was -- that sense. -- at all paternalism between corporations and their employees. Those days are long gone and right now. The responsibility that the corporations continue to have for a bit healthcare costs of employees are skewing business decisions skewering of screwing up business.

Sounds like useless and at the last probably didn't help gave -- way I worry I don't think you make your point about this heavy -- Well --

Italy that we need to would do what every other western countries that are on the planet has done which is. Find a different way of addressing health care costs and make it -- social rights. Not not.

I actually election to Gaza Strip that's the way to make sure we get Ouellet methods guys attribute about how I want to go to daughter Alexa that I want to be outnumbered three to one taught us from Lexington Dodd I want -- Carolina as well as the pensions and that's smear campaigns ought to Jack -- with jay Kaufman --

That is where object -- just -- how long have you known -- an MBTA employee commit to retire the twenty year. How long have you personally know. That that -- he gave Willie can retire after 43 year. With last year what was it like you -- No I would say. When I first was venture between your public service and none of this I would say over the last four years and have. Begun to understand some of the complexities of system of four years ago you can do about it. Well within within -- much like annual -- and artists for years later you start that we wake up. --

Went that that's a good point on very it's a well made point because. Is -- jumping up and down screaming this is outrageous it's gotta stop right away.

That's. -- What fifty years of history a local retirement ports below retirement -- fight that every -- the way how about this how about recognizing. Determination -- success not just good. Not just an intent to do something but the actuality of having doesn't sound -- when do you with the previous caller Todd and I say hey you know what. I wish you had -- at ten years ago Jarrett to say to -- chief veteran I wish you don't have fifteen years ago but the fact of the matter is it's being done why don't we applaud that.

Well it. I think the big problem here is that without the emotion. Without this sense of outrage. About how disgusting this stuff its its volume. This system should not exist there is no argument to be made for the sisters who says she -- I want to hear so much standing up and saying that so that you can tell it what the public -- okay might not want us representatives on the bill like it's a movie or anything else like that but that guy who's donated -- Koppen and -- garlic c'mon I'm in red allegedly fear it's not --

Have a problem I don't have a problem with -- theatrics it's fine because I think it does get. That's much they get the public's attention but the public gets there the attention of their elected elected represented it creates it it helped stanch the community gets its -- critical mass of.

They treat you behind the scenes -- Todd and I welcome to the bill signing ceremony.