US - A governmental report on reform of Massachusetts state benefits has found many public employees' pension income risks taking them below the poverty line, despite widespread public perception of excessive payments.
The report's authors found most public sector retirees received "very modest pensions". The average level of benefit paid was as low as approximately $23,000, which they conceded "deteriorate from modest to totally inadequate" when faced with rising inflation and "outdated" cost-of-living-allowances (COLAs).
The net result of this being, they concluded, many public sector retirees being forced towards or, in some cases below, the poverty line.
This was despite a limited number high-profile cases of overly generous or "abusive" benefits.
The report stated: "There is a belief that the public sector retirement system is overly generous. In truth, we are faced with the need to assure that public sector retirees do not slip below the poverty level after a lifetime of service."
The report also highlighted the need to develop a sustainable pension system that did not "serve to discourage young and talented citizens from entering the public sector".
In addition, the committee recommended a review of two social security-based laws which often resulted in large cuts in social security retirement benefits when taken alongside public retirement.
The Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) both significantly reduce social security pension payments when taken alongside a state employees' pension - by as much as 55% in the case of the WEP.
Calling it an "unfair financial burden", the authors said: "[The WEP and GPO] discourage many in Massachusetts from entering public service and penalize those who do. This unfair financial burden on those in public life in our state should be eliminated."
The report stated the measure enjoyed support form 335 members of the US House of Representatives, over 30 senators and president Obama.
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