Unanimous Override Of Veto

SEPTEMBER 2004
- Romney Rejected COLA Base Study - In a stunning rebuke, the Legislature has unanimously overridden
Governor Mitt Romney's veto of our Association's COLA base study.

Late
in June, Romney surprisingly vetoed section 375 of the FY05 state
budget, which sets up a comprehensive actuarial study aimed at raising
the base amount to which the COLA is applied. In continuing to
disregard public retirees, the governor called the study "unnecessary"
and struck the section from the budget.

This
move left Association leaders with no choice but to seek the support of
Legislative leaders to override the veto. With the formal session
coming to an end on July 31, just days after Boston was to be locked
down by the Democratic National Convention, Association officials had
little time to spare in obtaining the veto override.

After
non-stop lobbying by Association leaders, and many of our rank-and-file
members, the Legislature voted on an override on July 22. It was
unanimously passed by a vote of 156-0 in the House and 38-0 in the
Senate.

The new law will focus on an
issue that has frustrated our members for several years - the $12,000
COLA base. It requires the Public Employee Retirement Administration
Commission (PERAC) to analyze and study the costs and actuarial
liabilities of raising the base to which the cost-of-living percentage
is applied and file recommendations with the Legislature on or before
December 31, 2005.

PERAC's study
will include increasing the base from $12,000 to $22,000 incrementally
by the thousand and provide alternating COLA funding schedules which
would reduce the unfunded liability to zero by 2028, 2034 and 2038
respectively.

Because the
Commonwealth's pension funding law requires that any change in a
pension law, such as the COLA base, be treated as a future pension
liability, and money put aside for future payments, it became apparent
that filing bills each year for a higher base under the current funding
schedules were fruitless.

"Quite
simply, without addressing the future cost of a base increase, we were
spinning our wheels in chasing a change in the base," said Association
President Ralph White. "Although sympathetic, the Legislature has been
stymied by the mandatory funding schedule in effect for all of our 106
retirement systems. We will now have an opportunity to address this
issue in a realistic manner."

"Bob
Koczera (House co-chairman of the Joint Public Service Committee) and
his staff worked closely with Bill Rehrey, our legal counsel, in
drafting this budget provision and Bob went on to carry it in the
House," said Association Legislative Liaison Shawn Duhamel. "Steve
Tolman, the new Senate co-chairman, sponsored the provison in the
Senate. Getting the veto override was truly a team effort requiring the
support of the entire leadership team and members of both branches."

Other Pension Budget Items

In
addition to the COLA base study, there were other pension-related items
contained in the FY05 state budget. Here are two that may interest our
members:

  • Allowing
    a retiree to re-enter public service full-time if they pay back the
    amount of pension paid to them, plus interest, which, after working at
    least 5 years, would entitle them to retire with an enhanced pension
    based upon their new date of retirement. Editor's Note: A
    retiree still has the option of receiving their pension and working as
    a public employee part-time (no more than 960 hours), or waiving their
    pension totally while they're employed full-time in the public sector.
  • Raising
    from 21 to 22 the maximum age up to which certain retirees (i.e.,
    accidental disability retirees and surviving spouses) can receive a
    dependency allowance for a child who is a full-time student.
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