1999

JANUARY 1999 - A Comprehensive Package Into The Next Millennium - During
the past months, the Association’s Legislative Committee, chaired by
William Hill, prepared legislation that has been introduced into the
General Court’s 1999-2000 legislative session. As a result of its work,
the committee presents to the membership the following legislative
package of 15 bills. (Senate bills * have not received numbers at this
time.):

Percent Increase

(Senate
Bill*, Sen. Moore and Rep. Toomey): According to the COLA Law (Chapter
17, Acts of '97), the process toward annual payment of the COLA is
triggered by PERAC's rep[ort of the percent increase in the Consumer
Price Index (CPI) as determined by the federal government. For local
retirement systems, the COLA is the CPI's percent increase, capped at
3%. For the state/teachers' retirement system, the approach, adopted by
the Governor/General Court, has been to set the COLA at the CPI percent
increase. Recent Federal trends to reduce the CPI percent increase have
raised serious concerns relating to the continues use of this federal
standard to set the COLA.

This bill
allows the local retirement systems to set the COLA percent increase at
the same percentage rate actuarially assumed under their funding
schedules, capped at 3%. It also allows the Legislature to set the
percent increase for the state/teachers systems at the assumed rate
under their funding schedule (currently 3%).


Maximum Base Amount

(Senate Bill*, Sen. Moore): Please see related COLA article. This bill increases the $12,000 cap to $16,000. For local retirement systems, it is subject to local acceptance.


Municipal Retiree Minimum Pension of $10,000

(House
Bill 350, Rep. Toomey): The retirement law allows cities and towns to
increase the regular or disability pension of a retiree, with 25 or
more years of service, to 50% of the current salary for his former job
(Sections 90A, C and D of Chapter 32). In the 1999 Fiscal Budget, the
Legislature increased the pensions of a state or teacher retiree, with
25 or more years of service, to a minimum of $10,000.

House
#350 allows counties, regions, cities, towns and other political
subdivisions to increase the pensions of their retirees, with 25 or
more years, to $10,000. If enacted, it is subject to local acceptance.


Minimum Survivors Pension of $6,000

(Senate
Bill*, Sen. Moore and Rep. Toomey): Widows, and widowers, of public
employees (known as Option (d) survivors) receive a minimum pension of
$3,000 annually. Widows of disabled retirees (Section 101 retirees)
receive a minimum pension of $6,000 annually, as a result of Chapter
171, Acts of ‘95.

This bill
increases the Option (d) minimum pension from $3,000 to $6,000. The
increase would be automatic for state/teachers systems, and for local
retirement systems, it is subject to local acceptance.


Widow(er)’s Right to Remarry

(House
Bill 352, Reps. Toomey and Kaprielian): Surviving spouses of public
employees and disability retirees, lose their pension when they
remarry, in most cases. An exception is Option (d) survivors (see
above) whose pensions, upon remarriage, are reduced to the minimum
pension. House #352 eliminates the prohibition against remarriage by
the surviving spouse of public employees and disability retirees and
enables them to retain their survivor pension.


Basic Group Life Insurance of $10,000

(House
Bill 351, Rep. Toomey): The state’s group insurance law (Chapter 32A)
currently establishes the basic insurance benefit at $5,000.
Municipalities and other subdivisions can set the basic life insurance
at any amount (Chapter 32B), but in most cases have set the amount at
$5,000 like the state. House #351 establishes the basic life insurance
under the state insurance plan at $10,000. As earlier stated, no change
in the state law is required to allow cities and towns to offer $10,000
in basic life insurance


Dental Insurance Study

(Senate
Bill*, Sen. Moore): The state and local group insurance laws (Chapter
32A and 32B respectively) do not provide dental insurance coverage for
retirees and survivors. In limited cases, municipalities continue to
offer dental insurance to their retirees, but in most cases (including
the state plan) dental insurance ends upon retirement or 18 months
after retirement under COBRA. This bill establishes a special 5-member
(Sen./House Ins. Chr., A&F Sec’y, Mass Municipal rep., and RSCMEA
rep.) commission to study the dental insurance issue and report back to
the legislature by November 1st.


Dental Insurance – Municipal Retirees

(Senate
Bill*, Sen. Moore and Rep. Toomey): Under the local group health
insurance law, municipalities can offer to their employees dental,
vision care or long term disability insurance (Section 15, Ch. 32B).
Unlike the group health and life insurance,the dental, vision or
disability can be offered with the employee paying the full group
premium, even if he is only paying part of the health or life insurance
(i.e., 50% or 25%). This bill allows municipalities to offer dental,
vision or disability insurance to their retirees at the full or part
premium cost.


Reinstatement on Health Insurance

(Senate
Bill*, Sen. Moore) State law requires that the state, municipalities
and other subdivisions allow a retiree, who, for example, may have been
covered under his wife’s health insurance, to request reinstatement to
the state or local health insurance plan. While the national trend is
towards the elimination of pre-existing conditions, the state currently
requires the applicant for reinstatement to pass the “more demanding”
medical exam for life insurance. At the local level, the courts have
singled out the state standard as an example of conditions that could
be adopted by municipalities. This bill eliminates the requirement that
a retiree (or employee) pass the life insurance medical exam (“medical
proof of insurability”) in order to be eligible only for the state or
local health insurance plans (Sec 10, Ch 32A: Sec 9, Ch 32B
respectively).

Public retirees, who
are veterans and worked before 7/1/39, are entitled to a pension and
withdrawal of their pension contributions - commonly referred to as
non-contribs. Here are 3 bills affecting non-contribs.


Non Conrib Option C “Pop-Up”

(Senate
Bill*, Sen. Moore and Rep. Toomey): Currently “contributory” retirees,
who select an Option C (reduced) pension in order to leave a survivor’s
pension upon death, are entitled to receive their full pensions if
their beneficiary predeceases them(“Pop-up”). When the “Pop-Up” was
originally instituted in January 1988, only those who retired after
that date were given this benefit, including non-contribs. In the 1999
Budget, the “Pop-Up” was granted to retirees, who retired before
January 1988. Because of a technical oversight, the non-contribs were
not included, as they had been in January 1988. This bill extends the
“Pop-Up” to non-contrib veterans. For the state system, it is automatic
upon enactment and for local systems, it is subject to local
acceptance.


Non Contrib COLA

(Senate
Bill*, Sen. Moore and Rep. Toomey): Before the new COLA law (Chapter
17) all retirees, including non-contribs,received the COLA. Statutory
interpretations have been made that the non-contribs are entitled to
the COLA under Chapter 17 as they were according to the old law, and
the state, adopting such an interpretation, has paid its non-contribs
in Fiscal ‘99. But the debate over Chapter 17’s language, and intent,
continues, resulting in no fiscal ‘99 COLA for non-contribs in
communities accepting Chapter 17. This bill eliminates any future
debate on this issue, by requiring that when a COLA is paid to
retirees, it will also be paid to non-contribs. The bill is subject to
local acceptance.


Non Contrib State Tax Exempt Status

(Senate
Bill*, Sen. Moore): Unlike the pensions of an overwhelming majority of
retirees (contributory retirees), the pensions of non-contribs are
subject to state income tax. This bill would extend the non tax-exempt
status, now accorded the pensions of contributory retirees, to non
-contribs.


Disability Pensions

(House
Bill 305, Rep Connolly): During the 1997-1998 Session a “comprehensive”
bill was drafted that addressed several aspects of the disability law.

House
#305 addresses three crucial issues affecting disability retirees.
First, disability retirees, out on disability for more than 10 years,
will not be subject to re-examination unless they request such. Second,
if a disability retiree is reinstated and his new job pays less than he
was receiving when he retired, the new public employer will make up the
difference. Third, the old formula (pre Nov.’96), to calculate whether
a disability retiree has exceeded the amount of outside earnings that
he is legally allowed to make, is re-established in the disability law.


Indemnification of Medical Expenses

(House
Bill 306, Rep. Connolly): Disabled police and fire retirees in cities
and towns, that have accepted Section 100B of Chapter 41, submit their
disability-related medical bills to their municipality for payment
(indemnification). Association members have complained of unusually
long delays in payment or downright refusal to pay reasonable and
necessary expenses. House #306 requires that a Sec. 100B community act
on a medical bill within 60 days of receiving satisfactory
documentation and if a disability retiree is forced to go to court for
payment and prevails, the municipality will be responsible for the
retiree’s legal costs.

Tags: