Cahill has consulted with US Representative Joseph Kennedy II – the man with whom the plan originated – and is looking into allowing all state residents unfettered access to the managers, who attempt to earn at least 8.25% a year on pension money, according to the Boston Globe.
Any such move would make the Bay State pension fund the only one in the nation that allows private investment. However, Massachusetts residents dreaming of heady returns shouldn’t jump too quickly. According to the Globe, big banks will put up stiff resistance to the Kennedy plan, mostly because the pension plan would then essentially be a mutual fund in competition with other products.
Federal law might have to be altered to allow such a move. According to Ed Hennessee, Tennessee’s director of retirement and an officer with the National Association of State Retirement Administrators, ”[y]ou can only have in your pension fund publicmoney contributed by employees and employers.”
Political considerations may also play a role. With murmurs of a Governorship run in Kennedy’s future, state Republicans will almost certainly attack the plan. Despite these hurdles, Kennedy and Cahill believe that the move would be good for Bay State middle- and low-income families and would also give the $36 billion fund more clout, as well as lower overall costs.