Regional Retirement Boards Fully Phased In

MAY 2003
- Continue To Serve Members - In 1997, during the booming up-tick of one of the best economic times
ever recorded, county government in Massachusetts took a dramatic turn
for the worse. What began as a financial crisis in one of the country’s
oldest counties, Middlesex, quickly spread across the state.

Over
the course of the next year, Berkshire, Essex, Hampden, Hampshire,
Middlesex and Worcester County were each dissolved. Barnstable, Dukes,
and Nantucket County had previously reorganized at their own will,
therefore were not impacted by the dissolution. The remaining counties
of Bristol, Norfolk and Plymouth have retained independence and are
financially strong.

While it was
important that the various functions performed by county government be
continued by the state, the overriding concern for county retirees was
the solvency of the pension systems, along with the continuation of
health insurance coverage. Thankfully, the operation and financial
condition of the county retirement systems was completely separate from
that of the now defunct counties.

The
county retirement boards have always operated on the same basis as all
other public retirement systems under Chapter 32, which is as an
independent body under the supervision of the Public Employee
Retirement Administration Commission (PERAC). This autonomy ensured
that county retirees had nothing to fear in terms of their retirement
system’s ability to meet its obligations.

“There
was definitely a period of uncertainty with our members who belong to
the retirement systems of the now defunct counties. Thankfully those
concerns were unfounded,” explains Association Legislative Liaison
Shawn Duhamel. “Besides, members should know that under state law their
pensions and their health insurance can never be taken away, regardless
of the circumstances.”

A Smooth Transition

One
key piece of the original 1997 legislation, that dissolved many of the
former counties, was a provision that addressed the then uncompleted
terms of the county’s elected treasurer. Since the county treasurers
were duly elected officials, placed in office by the voters, it was
deemed to be improper to eliminate the office prior to the end of their
term.

In 1997, the treasurers of the
soon to be abolished counties were serving in the first year of new six
year terms. Elected in November 1996, each of the county treasurers was
to serve until January 2003.

In
addition, legislative leaders felt that it was necessary to allow the
treasurers to continue in their positions in order to assist with the
phase-out of the county itself. Since the treasurers were also the
chairmen of the county retirement boards, it was also important to
maintain the continuity of the retirement system during the transition
period.

Under the provisions of the
counties phase-out, retired county employees remained as members of the
regional retirement system, while active employees for the abolished
county became state employees and members of the State Retirement
System. All active and retired employees from the abolished county
became enrolled in the state’s health insurance plans under the Group
Insurance Commission.

Retirees and
active employees from the towns, districts and authorities that make up
the regional retirement systems have remained members of that system.
There was no change in their health insurance coverage at the time of
the transfer.

“The county treasurers
played a pivotal role in the seamless transfer of county retirees and
employees into the state pension or health insurance system,” said
Association President Ralph White. “In addition, they made sure that
the assets of the municipal retirees and employees, who now make up the
regional systems, remained intact.”

After
the phase-out and reorganization of the counties, the former county
retirement systems took on a new role as regional retirement systems.
These regional systems manage the pensions of thousands of retirees and
active employees from the hundreds of small towns, districts, and other
units within the geographical confines of the former county.

Treasurers New Roles

Overseeing
the management of the systems pension fund and the day to day operation
of the retirement board has long been the responsibility of the county
treasurer. Fortunately, the opportunity for the former treasurers to
remain at the head of the regional retirement systems was preserved
under the legislation that abolished the counties.

When
the treasurers’ terms expired in January, it ushered in a new
composition for the regional boards. While still consisting of five
members, the manner in which the board’s chairman is chosen, has been
changed.

Under the new system, it is
the “first” member who is chosen by the other four members to serve as
chairman of the board. As for the other four members, one member is
chosen by the regional retirement board advisory council (treasurers of
the member units), while two are elected by the system’s membership.

The
final (known as the “fifth”) member cannot be a member of the regional
retirement system and is chosen by the first four members. It should be
noted that the terms of the first and fifth members are staggered so
that their selections do not occur simultaneously.

In
Essex County, former Treasurer Tim Bassett serves as both the chairman
and executive director of the Essex Regional Retirement System. Since
the transition to a regional system, the retirement Board has purchased
its own office space and has been proactive in member outreach.
“I
feel that I now have the freedom to dedicate all of my time exclusively
to the retirement system, rather than to the multiple functions that
had been part of county government,” says Bassett. “Since the
transition, the Board has been very aggressive in communicating with
the members, as well as units that comprise the Essex system. We have
at least one ‘town meeting’ a month.”

Former
Worcester County Treasurer Michael Donoghue agrees that the retirement
system has benefited from the change. As chairman and chief executive
officer of the Worcester Regional Retirement System, Donoghue has gone
to great lengths to improve upon the retirement system.

“It
was a real challenge to transition from the county system of government
without disrupting people’s lives,” Donoghue. “Now that the transition
is complete, I would have to say that the system is stronger. Just in
terms of the time we are able to spend on outreach to our active and
retired members alone, it is a better system.”

Jim
Fahey, the former treasurer of Middlesex County, agrees with his two
fellow former treasurers on how the transition away from county
government has benefited the retirement system. As is the case in
Essex, the Middlesex Retirement System recently moved into new office
space that the system had purchased.

“The
Board and our staff have been spending a great deal of time working
with municipal officials to assist them in addressing our pension
funding obligations,” explained Fahey. “When the county dissolved, the
pension system got hit with some of the unfunded pension obligation
owed by the county. We have since resolved that issue and are working
to strengthen our system.”

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