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Benefits March 7, 2011
Maine’s LePage: Pension Cutbacks Aren’t Easy
March 7, 2011 (PLANSPONSOR.com) – Maine Governor Paul LePage says his recently unveiled package of public employee pension cutbacks will hurt government workers, but the move is necessary to get a handle of Maine’s ballooning pension shortfall.
Reported by Fred Schneyer
LePage made the comments over the weekend in his regular weekly radio address. “My budget offers sensible reform to our retirement system that saves $524 million in past due payments now, cuts our total unfunded pension liability in half, and puts us on a sustainable path toward fully funding our retirement obligations as required in the Maine Constitution,” LePage declared.
The Maine chief executive continued: “Our fix is not easy and is filled with shared sacrifice. Retirees are asked to accept COLA freezes and caps. Current state workers and teachers must contribute an additional 2% to their retirement and the newest hires will have to work longer. Our pension proposal also asks for continued sacrifice from taxpayers who will have to dig even deeper to bear the cost of retiring old debt for sixteen years to come.”
LePage said state workers and teachers who made their case against the changes to lawmakers last week are right in one respect: Promises made to them years ago could never be honored because Maine has limited resources.
The transcript of LePage’s remarke are here.