DISABILITY REFORM COMMISSION CONSIDERING OPTIONS

Association Pushes For Improvements

MARCH 29, 2013: The Special Commission on Disability Retirement has entered the final phase of its work. This past week, Commission members began to outline potential changes and reforms that might be recommended within the Commission’s report.

After nearly eight months of study and deliberation, the Commission has found no evidence of widespread inefficiency or scandal that would warrant a major reform of the disability law for public employees and retirees.

“One of the things that I believe is important for us, as a Commission, to include in the report is a statement about the strength of our current system and the success that has resulted from the passage of Chapter 306 back in 1996. When this Commission was created, some in the media portrayed it as being necessary to “clean up” some perceived mess in our system,” says Association President Ralph White, who serves as the Retiree rep. on the Commission. “After many hours of meetings and public hearings we have found no smoking gun. Actually, what we have found is that the system works pretty well as it is set up now.

“Credit should be given to the work done by PERAC and local retirement boards. They have worked well together for the past seventeen years to professionalize the way disability applications are processed, as well as to oversee retirees once they have been found to be disabled.”

At Wednesday’s meeting, White also recommended that improvements be made to the law governing ordinary disability retirement – those not job related.

Under the current law, which has been in place for many decades, those employees found to be disabled from a non work-related condition have their pension calculated as if they are either 55 (pre-April 2, 2012 employees) or 60 (hired on or after April 2, 2012). This benefit simply uses the age calculation that would normally be available at either age 55 (1.5%) or 60 (1.40). All employees must be vested with at least 10 years of service in order to apply for an ordinary disability pension.

However, veterans retired under ordinary disability are eligible for a flat 50%. Age is not used as a calculating factor.

“Veterans retiring on ordinary disability are pretty well taken care of with a 50% benefit, but non vets really get a raw deal. A 45 year old employee, using the 1.5% factor with twenty years of service would only receive a 30% pension,” explained White. “These pensions end up being very small and place undue financial burdens on families, whom are already struggling with an illness or injury. We have a chance to correct what I view as a serious problem, I hope the Commission agrees.”

White’s proposal would boost the age factor for non-veterans to 2.0%, rather than the current 1.5. Association officials feel this small increase grants ordinary disability retirees with a more livable pension benefit.

In addition, the Association had previously recommended that the Commission move to increase the earnings restrictions on disability retirees by an additional $10,000. We have also called for reforming the oversight requirements imposed by PERAC on long-standing disability retirees.

The Commission is expected to complete its work in May, at which time it will submitt a report to the Legislature and Governor Patrick for further action.

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