The current plan, known as a defined benefit (DB) plan, guarantees a fixed pension at retirement. Romney would introduce a plan known as a defined contribution (DC) plan, whereby employees would not contribute to the retirement system but rather would invest their contributions in a 401(k) type plan. Such a plan is common in the corporate world, but rare in the public sector. Only four states have such a plan, and it is not well liked.

While the Romney pension plan has yet to be formulated and presented to the Legislature, Romney and his lieutenants have been floating his intentions to the press, while at the same time criticizing our Chapter 32 DB plan which he says is too generous.

In a scathing rebuke to Romney, an angered House Speaker Tom Finneran accused Romney of misleading the public on his budget plans and said House members are frustrated that Romney aides can’t provide details of some of his proposals.

Finneran specifically pointed out that Romney’s statements about our retirement system were erroneous. Romney had earlier misstated that members could retire on a 75 percent pension after 20 years service.

“Even though he’s backed off a little under union pressure, there’s no doubt that Romney wants to push for a 401(k) type plan,” said Association President Ralph White. “It (DC plan) takes the state off the hook when the employee retires, and there’s no funding liability during the employee’s career.

“Under such a plan, the employee is constantly focused on the market. He’s rolling the dice on the market – a market that has come up snake eyes over the past three years. Public employees in Massachusetts already have the additional opportunity of investing up to $12,000 each year in a deferred compensation plan, under which the employee can select several different investment options. But their nest egg is always secure with our defined benefit plan.”

White said the Romney team has a corporate mentality, where money is the bottom line at all times. For example, Eric Kriss, formerly of Bain & Co. (Romney’s Secretary of Finance) said, “Our [state] pension system resembles much more of what corporate America had in the immediate post-war era, and the world has changed dramatically. What we are proposing, in its essence, is to move much more toward what corporations do today than what they did in 1950.”

“If retirement benefits at Polaroid, Enron, WorldCom and Global Crossing are representative of corporate America, I believe members of our system will say, ‘thanks but no thanks’,” White said.

Roy Sacco, President of the Massachusetts Association of Contributory Retirement Systems (MACRS) says, “There is no place in MACRS for the Romney DC plan. Such a plan would include a local government option and we don’t want it.”

Sacco, a retired firefighter, also lives in Belmont. He is a town meeting member and a community activist, but says he is not in the same world with Romney. “We live in the same town, but we’re in a different world,” he said.