Disability Earnings Bill Clears Senate

Option B & C Recalculation Also Before House

August 1, 2014: An Association proposal that would increase the allowable earnings limit of all disability retirees cleared the Massachusetts Senate yesterday, on the final day of formal legislative action for the 2013-2014 session.

S1250, sponsored by Senator Thomas McGee (D-Lynn), was engrossed by the Senate and forwarded to the House for further action. The bill is now pending before the House Committee on Ways and Means. Association officials are hopeful that the bill, renumbered as S2343, can be passed into law during the remaining five months of 2014.

While formal sessions are completed for the year, the legislature will continue to meet twice a week until January 7, 2015, when the new 2015-2016 Session begins. Procedurally, S2343 can be approved and enacted into law during an informal session.

The bill increases the outside earnings limit of disability retirees by $10,000, from the current level of $5,000 to a new level of $15,000. If the increase becomes law, it will mark the first increase in the outside earnings limit since 1982 – a span of 32 years!

In addition, legislation that would recalculate the Option B & C pensions of those who retired prior to July 1, 2004 also remains under active review by the House Committee on Ways and Means. The bill, H2354 filed by Rep. Thomas Golden (D-Lowell), is the source of intense interest from those members retiring prior to July 1, 2004 and having chosen Option B or C.

The issue stems from a change in pension mortality tables used in the calculation of Option B & C benefits for those retired on or after July 1, 2004, which have resulted in a higher benefit. Due to the high cost of recalculating benefits, the issue has remained unaddressed.

Association officials believe that interest remains high to find an affordable way to resolve the discrepancy between the old and new mortality tables. Efforts will continue during the informal sessions to move the bill.