Pension Insights in Massachusetts

If someone is asking for numbers related to pension sustainability, it’s a clear sign that we have some serious issues, according to Charlie Chieppo from the Pioneer Institute in Boston. However, politically speaking, things don’t seem pressing yet.

The highest pension recipient last year was Thomas D. Manning, who previously served as vice president of the Massachusetts Chan College of Medicine, with an impressive payout of $349,905. After 34 years at MIT, he retired in 2012.

Following him were two more former Chan University officials: Vivian Budnik, a neuroscientist who retired in 2024 and received $341,804, and Joyce Murphy, who was the deputy federal medicine chancellor until 2018 and earned $341,061.

William Bulger, the former president of the UMass system, also had a large pension of $274,538 last year. Bulger, who resigned from UMass in 2003 amid a scandal involving his brother, James “Whitey” Bulger, topped the list of state pensions.

Interestingly, most of the top pension recipients are linked to the University of Massachusetts System. Among the top 20, only Daniel J. Warwick, the former Springfield Public Schools Superintendent, stands out as unrelated. He is set to retire in 2024, and last year, he gathered $239,669 in benefits.

Sean Duhamel, chief executive of the Massachusetts Association of Retirees, pointed out that while some former high earners are enjoying substantial pensions, the average pension payout is much lower.

The average pension last year hovered around $48,700. For teachers, it was roughly $51,800, while other state workers saw about $45,600 on average.

Duhamel also mentioned that Massachusetts is unique in that it doesn’t include public employees in Social Security. Even those retirees who qualify typically rely heavily on their public pensions for income.

“The effectiveness of these pension systems is crucial for ensuring people’s financial security in retirement,” he stated.

State employees need a minimum of 10 years of service to be eligible for their pensions. To officially retire and start receiving benefits, they must be at least 55—or sometimes even 60—or have completed 20 years of service.

Pension calculations depend on years of service and are based on the highest annual salary over three (or sometimes five) consecutive years. Payments are capped at 80% of that average.

David Holway, head of the National Association of Government Employees, emphasized that most state employees are everyday workers who contribute significantly to their pensions themselves. “It’s not about the high earners at the medical school,” he clarified, but rather the average individuals who keep things running under tough conditions.

While the highest pensions go to those in academia and administration, the Department of Corrections received the most overall, with roughly $220.8 million paid out to about 4,400 beneficiaries last year.

The Massachusetts State Police were next in line, with their beneficiaries receiving $204.5 million, averaging $83,810 in benefits each, which is the highest amount for any agency with over 1,000 beneficiaries.

At the top of the state police benefits was John D. Pinkham, a former lieutenant colonel who retired last year with a payout of $199,736.

It’s worth noting that certain quasi-public agencies, like the MBTA, have their own pension funds and are not part of the state system. Boston operates its own retirement system, which disbursed $760.6 million in benefits to around 15,000 beneficiaries in 2024.

Last year, the state pension system served 135,820 people—1,700 more than in 2024—marking a 5 percent increase since 2020 and a 14 percent uptick since 2015.

In a positive trend, Massachusetts pension fund balances reached a record high of $121.1 billion in the first quarter of 2026, with the State Pension Reserve Investment Management Board announcing that this surpassed its return target by 7%, achieving a solid annualized return of 9.6% for FY2025.

A spokesperson from the board relayed that its CEO, Michael Trotsky, expressed satisfaction with the fund’s performance.

This assurance stands in stark contrast to the broader issues troubling national pension systems. A recent report by Equable indicated that, while there have been minor improvements, many public pension systems across the nation are still struggling.

“It’s a stark reminder that even with strong performance in recent years, public funds are still catching up from the downturn in 2022,” the report noted. “Essentially, they’re surviving, but not exactly thriving.”

Chieppo emphasized that reforms could bring much-needed flexibility to pension plans while alleviating the financial load on the state. Yet, such changes seem unlikely to occur soon.

He added, “Pension systems really should have adapted long before now to avoid falling funding levels and volatility.” Though, he noted, that’s easier said than done.

When compared to other public retirement benefits, like the troubled MBTA Retirement Fund, Chieppo mentioned that the National Pension System is “comparable to Fidelity.”

Holway argued that having a pension is a significant advantage for the public sector, especially in appealing to civil servants over private companies.

“Without a pension plan, health insurance, or vacation time, who would want to work for the state?” he asked. “State employees usually earn less than their private-sector counterparts, so benefits are essential to attract talent.”