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106 retirees collect $100k or more in state worker retirement benefits

Arthur M. Pappas, a University of Massachusetts Medical School doctor, retired a decade ago with a pension of more than $230,000. Arthur M. Pappas, a University of Massachusetts Medical School doctor, retired a decade ago with a pension of more than $230,000.
By Matt Carroll
Globe Staff / March 22, 2009
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The number of state retirees who take home pensions of $100,000 or more has more than tripled over the past five years, adding to the pension system's financial stress.

One hundred six retirees, or their survivors, are paid six-figure pensions, up from 33 in 2003, according to state figures. The list is dominated by university and college officials and professors, doctors, and high-ranking State Police officers.

Topping the list are two University of Massachusetts Medical School doctors, Arthur M. Pappas, the former Red Sox medical director who retired a decade ago with a pension of more than $230,000, and Aldo Rossini, who receives slightly more than $200,000.

Third, at just under $200,000, is William M. Bulger, the former president of the University of Massachusetts and onetime state Senate president, who won a legal battle in 2006 to boost his pension an extra $17,000 by counting his university housing allowance.

More than 600 take home $75,000 or more.

The list includes more than 45 people from the UMass system, most from Amherst, more than 25 State Police officers, and 15 from UMass Medical School. A small portion, about 1 in every 500 retirees of the 50,000 in the system, take home more than $100,000, but critics say the increase in high pensions and the various abuses reported recently fuel public outrage.

"It is way out of line with reality," said David G. Tuerck, executive director of the Beacon Hill Institute at Suffolk University, a think tank on economic issues.

Pensions for UMass and UMass Medical School officials have escalated as a result of higher salaries paid because of competitive reasons during the 1980s and 1990s, said UMass spokesman Robert Connolly. The size of a state pension is determined partly by the average salary an employee earns over his or her last three years on the job.

The system conducted salary and peer analysis of other systems, he said. The idea was "attract and retain good people," he said.

Connolly pointed out that the pensions of UMass Medical retirees are 85 percent funded by contributions generated by the medical school, and do not come from the state, unlike other state workers.

The average state pension is about $24,000; state workers do not receive a Social Security benefit for their work in the state system. Nationally, the median annual private pension in 2006 was about $7,200, according to an Urban Institute study, plus Social Security. The average Social Security benefit is about $13,000.

The state pension system had major investment losses in the market meltdown last year, dropping from a 2007 peak of $53 billion to about $38 billion.

Stung by recent reports of pension abuse, a 15-member panel, made up of retirement officials, legislators, and outsiders, is gearing up to recommend reforms.

The panel is known as the Blue Ribbon Panel on the Massachusetts Contributory Retirement Systems.

The blue ribbon committee's goal "is to make the system more financially viable," said Alicia Munnell, chairwoman and a professor at the Center for Retirement Research at Boston College. The report is due by July.

One state retiree, Richard Farris, who receives a pension of about $176,000, said he is as upset about abuses as everyone else, but that he did nothing wrong.

The 72-year-old professor, who worked for nearly 30 years before retiring in 2002 as head of the Polymer Science and Engineering Department at UMass-Amherst, said he took only what was offered and worked hard to get what he is given.

"I'm happy to receive it and I hope people don't resent it," said the Korean War veteran. "You play the game by the rules that are there and if they want to change the rules in the future, that's something to consider."

State workers receive what are known as defined benefit plans, which have rapidly lost popularity among private sector employers because of their expense.

In a defined benefit plan, the benefits to the retiree, such as monthly payments and healthcare costs, are often locked in for life, no matter how costs change later.

Nationally, the percent of private sector workers receiving defined benefit plans has plummeted, from 39 percent to 20 percent between 1980 and 2007, while more than 85 percent of public employees receive them.

Matt Carroll can be reached at mcarroll@globe.com.

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