Our objective of this first phase of pension reform - we know this system has been subject to some outrageous abuses by former colleagues and individuals classified as insiders. This bill ends those abuses within our system and reestablishes the foundation of what is important in this pension system, which outdates Social Security. 

It eliminates the so-called gaming of the system which mars all public employees.  We have 51,000 state retirees with average pensions of $24,000.  Seventy percent of the pensions will be paid for by the employee when they retire.  Folks that have entered after 1996 if they stay and collect will actually fund the entire benefit paid to them at retirement.  I say this because some want to criticize the entire system.

We know the system is not perfect.  Let me talk about what we do. 

The legislation eliminates the one day for one year of service requirement.  If they work for four months in elective office they get four months of creditable service.  

We prohibit creditable service for employees who make less than $5,000 on a municipal level. 

We eliminate the king for a day rule used to boost pensions for working one day in a certain position of higher rank. 

We eliminate section 10 benefits for elected officials and require all officials to work ten years to become vested in the system. 

We change the benefits of the MBTA employees, identical to language in the transportation bill. 

We allow local boards to realize cost savings with tools to save on administrative costs. 

We mandate direct deposits of allowances, allow the local system to withhold health care contributions from retirement pay, and allow local systems to create non profits to mail and communicate with members. 

 Let me define what we will define as wages moving forward.  It's a subject of many amendments before us. 

Wages for this chapter shall mean base salary and other base compensation paid directly by the employer.  It includes payments for shift differentials, cost of living adjustments and in any applicable collective bargaining agreement or contract.  Those will remain. 

We will exclude bonuses, overtime, severance pay, unused sick leave, auto and housing allowances, per diems, lodging, travel, insurance premiums and amounts paid over salary for professional development. 

This makes some immediate necessary changes to rid abuses.  This reestablishes the foundation of a very successful and very fair retirement system for our employees.  It's the first of at least two pension reform bills that will be before this body in this session.  They are changes this legislative body have addressed prior to being on the front pages of newspapers.  Aspects that make up the legislation are the workings of nearly 130 members.  Each and every one of you have been part of the bill today. 

I hope the bill is adopted.

 

 

Attachment	Size
House Retirement Bill HB4054.pdf	3.04 MB
Senate Retirement Bill SB2026.pdf	3.11 MB