Pension Reform Legislation Filed By Governor Deval Patrick

Pension Reform Legislation Filed By Governor Deval Patrick
Pension Reform Legislation Filed By Governor Deval Patrick

Eliminates Early Retirement For Many

FEBRUARY 17, 2011: Governor Deval Patrick has filed legislation, HB35, which creates a new retirement formula for state and local government employees hired after July 1, 2011. At this time the Governor has strong support for reform by both the House and Senate Leaders.

Among a number of changes in our current statute, the Group 1 pension formula, which includes the vast majority of public employees, does not allow retirement until age 60 and changes the 80% maximum formula age from 65 to 67.

Download the section by section summary of HB35.

However, the 2.5% formula at age 67 is reduced each year under that age, by 0.15 rather than the current age 65 reduction of 0.10. This means that a new member who retires at age 60 with 30 years service would be entitled to 43.5% instead of 60% under the current formula.

There is also a reduction under the Group 2 and Group 4 (public safety) formulas, which arguably is unfair. "However, long-term Group 1 employees for many reasons, other than a disability, who want to retire at a reduced pension before age 60 probably have the best argument," says Association President Ralph White.

"But times have changed, our retirement systems, benefits and unfunded liability have been under fire at a level never previously experienced," noted White. "While the legislation protects current employees and retirees it may be difficult for unions to lobby against the new plan. There definitely will be reform, and the best argument might be that the formula is too extreme when compared to our current plan."

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