Boston–A week after passing comprehensive legislation to overhaul the state transportation system, State Senator Benjamin B. Downing (D-Pittsfield) announces that on Tuesday, the Massachusetts Senate continued to push its reform agenda with unanimous approval of a bill that will tie off loopholes in current pension laws to end abuses and save taxpayer money.
“These actions are the first in a set of long overdue steps we must take to ensure no one is allowed to game the system,” said Downing. “By closing loopholes, this proposal strengthens state pension laws. I look forward to further recommendations from the Commission on the larger, more complex pension issues we must tackle.”
The state’s pension system is an important benefit for state workers who chose generally low-paying careers in public service over the private sector. The average pension for Massachusetts public employees is approximately $24,000 a year. There are examples, however, of individuals who exploit loopholes to increase pension payments at a high cost to the state.
The Senate legislation is just the beginning of important fixes to state pension laws. The bill also directs the currently-established Blue Ribbon Commission on Pension Reform to review broader issues within the system, such as capping large pension payments, and make comprehensive reform recommendations to the Legislature by September 1, 2009. Additionally, the Joint Committee on Public Service will be looking at further reforms.
The Senate legislation contains seven common-sense reforms of our public pension system:
· Re-defines “regular compensation” to exclude housing allowances, use of motor vehicle and travel;
· Removes the “one day, one year” provision that allows elected officials to claim an entire year of credible service for working one day in a calendar year;
· Eliminates the ability of municipal officials to receive pension credit for service in an unpaid position;
· Reforms the current accidental disability retirement benefit for individuals who are injured while temporarily filling in for their supervisor;
· Removes a provision that allows elected officials to claim a “termination allowance” based on the failure to be nominated or re-elected;
· Aligns MBTA employee pension with the state system. Eliminates the 23 years and out for future T employees. (This reform was also included in the Senate transportation reform bill passed last week.);
· Reforms dual-service pensions so that an individual cannot combine the compensation from two positions to artificially increase one’s pension. An individual who is a member of two or more systems will receive benefits as if retiring separately from each system.
The Senate pension reform package was strengthened today by several amendments that were approved on the Senate floor, including one that prevents local and state employees as of January 1, 2010 who make less than $5,000 from receiving pension credit. Another raises the vesting years for future elected officials from six to 10 years, bringing them on par with all other public employees.
The bill now goes to the House of Representatives for further action.