Retirees Benefit From Pop-Up

NOVEMBER 1998 - Municipalities Implement New Law - Retirees
from across the Commonwealth have begun to reap the benefits of the new
Option C “Pop-Up” law passed in July. Hundreds of eligible members from
the state and teachers’ retirement systems have seen their pensions
increase from 15-25%.

The new law,
passed within the Outside Sections of the FY’99 State Budget,
grandfathers pre-1988 retirees under the “Pop-Up” provision contained
within Section 12 of MGL Chapter 32. In 1987, the law was changed to
provide future retirees with the benefit, but existing retirees were
not included at that time. The Association had filed legislation to
include pre-1988 retirees for the past 11 years.

In
order to qualify for the “Pop-Up”, the member must have chosen Option C
upon his retirement. Additionally, the Option C retiree’s named
beneficiary would have to predecease them. Upon notification of the
retirement board, the retirees pension will then be increased to the
full Option A pension amount.

When
a member retires under Option C, they take an average pension reduction
of 20% to protect their benefactor in the event of their death. Once
the benefactor is chosen and the member retires, the law does not allow
for the Option or the named benefactor to be changed under any
circumstances. The only exception is the “Pop-Up” upon the benefactors
death.

Local Acceptance Underway

A
continued obstacle facing nearly every change in our 104 local pension
systems is the legal requirement that new benefits must receive local
approval prior to being implemented. As was the case with the
acceptance of Chapter 17 (COLA law), the legislative body of each local
retirement system must vote to adopt the “Pop-Up” law, after acceptance
by the local retirement board.

The
city council in a city, town meeting or council in a town, the
retirement board advisory council in a county, and the governing bodies
of districts and authorities act as the legislative bodies for their
prospective retirement systems. Essex County along with the cities of
Cambridge, Fitchburg, Lynn, Malden, Salem, Taunton, and Woburn to name
only a few, have already adopted the law.

In
the county systems, the County Retirement Advisory Councils are
expected take up the issue at their fall meetings. Most towns hold
their town meetings in the spring, but a handful plan to take up the
issue at their special town meetings in November.

“Due
to the scheduling of town meetings, it is going to take several months
to get everyone on board. Most of the cities will probably take up the
issue this fall, if they have not done so already,” said Legislative
Liaison Shawn Duhamel. “The cost to the retirement systems is very
small. In most cases, it will have no impact on the funding schedules.”

As
of press time, the Boston Retirement Board has adopted the “Pop-Up”.
The Boston City Council is expected to approve the measure by early
November.

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