In the letter from Greg Paquet on March 29, he criticized the Maine State Employees Association for criticizing Paul LePage’s proposal to deal with the unfunded liability without offering a solution.
Paquet seems to misunderstand the unfunded liability, which exists solely because the state failed to fund its portion of the costs of the state retirement system.
Consider the state retirement system as a house built by the state (to avoid participating in Social Security, at greater cost.)
Paying for that house involved sharing the cost between the state and the employees.
The employees have been paying 7.65 percent of their earnings, while the state was supposed to have been paying 5.5 percent of the employees’ salary, so the employees are paying 58 percent to the state’s 42 percent.
The unfunded liability exists because the state failed to make its payments. The result is that the house is carrying a mortgage, with the state as the entity responsible for the mortgage payments.
The employees already have paid their portion of the costs of the house.
Since the debt is owed only by the state, asking the MSEA (which represents the employees) to come up with a solution makes no sense. The employees don’t owe the debt; the state does.
There is a plan in place — since the mid-’90s — to pay off that debt. LePage just doesn’t want to make the payments.
The LePage plan is nothing short of attempted theft.
Harold Booth
Hallowell
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