New Disability Earnings Reporting Law

JANUARY 2012 VOICE: Contained within the myriad of issues addressed by the new Pension Reform Law (Chapter 176, Acts of 2011) is a section that eases the annual reporting requirements of long-term disability retirees, in connection with earned income, if any, during a calendar year.

Under the old law, each of the more than 15,000 accidental and ordinary disability retirees was required to file an annual statement of outside earnings, along with a copy of one’s federal tax return with the Pubic Employee Retirement Administration Commission (PERAC). As the state’s pension regulatory authority, PERAC is tasked with monitoring outside income of disability retirees, among its duties.

The provision, within Chapter 176, is modeled after a proposal filed by the Association in early 2011 (H2426, filed by Rep. Tacky Chan, D-Quincy). While the Association had proposed excluding those retired for 10 or more years from being subject to periodic reviews (including their physical and mental condition), the Legislature opted for a more moderate approach.

Beginning in 2012, disability retirees, who have been retired for 20 or more years and have earned no reportable income for the past 10 years, will be exempt from filing annual income statements. However, if the retiree once again gains reportable income they must resume filing an annual statement.

“This is a big step in the right direction,” says retired Belmont Firefighter Roy Sacco. “I retired on the ‘Heart Bill’ in 1985 and have not worked since, unless you count serving on the Board. It’s never made any sense to me as to why the state would want to bother with people in my position? Not only is it a hassle for me every year to pull paperwork together, but I can imagine it’s a headache for PERAC as well.”

Sacco is the chairman of the Belmont Retirement Board and a past president of the Mass. Association of Contributory Retirement Systems (MACRS).