On Nov. 15th, the House and the Senate approved major changes to Massachusetts’ pension laws. Throughout the process, Local 509 worked in coalition with other public employee unions to minimize the impact on current and future members. We were largely successful in preventing cuts in benefits to current members and somewhat successful in stopping deeper cuts to future members.
Here is a brief overview of the bill:
- The only possible change for current employees is that beginning April 2, 2012, you may request that your time be pro-rated by group classification. So if you had time in a higher group you could pro-rate that time. It is not known yet how this will work and who might benefit. It may be that you pro-rate both your group and your salary so it would be vary person to person. The key here is that it will be your option (after 4/2/12) so you will either benefit or be held harmless. The Public Employee Retirement Actuarial Commission (PERAC) will issue regulations on how pro-rating will work. Once they do, we will get them out to the membership.
- The base upon which a retirees’ Cost of Living Adjustment (COLA) is based was increased from $12,000 to $13,000 and the bill also increased the minimum pension.
- One small but significant change impacts same-sex couples who retired after May 17th, 2004, and before May 17th, 2005. They will be able to retroactively select Option C because it was not available to them at the time.
- The bill, designed to save the pension system $5 billion over 30 years, cuts retirement benefits for future employees in several ways:
- It increases the retirement age by 5 years.
- It changes the formula for calculating your pension so that it takes longer to get to 80%.
- Pro-rates group benefits.
- Benefits will be based on average of highest five years instead of 3.
- Eliminates section 10 benefits.
- This is some benefit for future long term employees (30+ years), allowing them to achieve 80% faster and reducing their contribution rate.
We will continue to keep you updated on any news regarding changes to the state pension system.