Stanley Prevails On Behalf Of Former Counties

NOVEMBER 2000 -
Efforts of North Shore Rep. Benefit Local Retirees - Retirees, who hold membership in one of the state's six regional
retirement systems, owe a great debt of gratitude to a hard-working
State Representative from the North Shore. As a result of the abolition
of certain county governments, their retirement systems found
themselves in a state of perpetual limbo as to who would fund the
remaining liabilities associated with the former county.

In
early 1999, after several years of disagreement amongst state and
municipal officials on how to handle the problem, no resolution seemed
to be in sight. That is until Harriett Stanley (D-Merrimac), the vice
chairman of the powerful House Ways and Means Committee, took an
interest in resolving the policy stalemate.

The
abolition of county government presented many complex issues to policy
makers on Beacon Hill. None of these issues, however, was more complex
than the future of the county retirement systems and their retirees.
Stanley, a legislator with a background as an investment banker, rolled
up her sleeves and took on the issue. Her goal was simple, resolve the
problem and make sure no retirement system, and more importantly, no
retiree was harmed by the changes. As a close ally of House Speaker
Thomas Finneran, her involvement in the issue was a sign that the House
leadership wanted the issue resolved.

"We
were really at an impasse until Harriett Stanley stepped in and brought
everyone together to resolve the problem," explains Essex County
Treasurer Tim Bassett. "It ended up being a day, night, and even
weekend process for several months. Harriett kept the process moving
forward during a time when others would have given up."

Funding Was Concern

Middlesex
County government was abolished in 1997. Worcester, Hampden, and
Hampshire followed suit in 1998, with Essex in 1999 and Berkshire in
2000. As a result, over 4,000 employees were transferred from county
service to state service. This meant a transfer from the county
retirement system to the state retirement system. Remaining in the
county retirement system are municipal employees and retirees, along
with former county employees who retired prior to the transfer date.

Under
the law at that time, the county (regional) retirement systems would
have been responsible for the retirement liability that had accrued
prior to the employees transferring to state service. In realizing, for
example, that such a policy would cost the communities that participate
in the Essex Regional Retirement approximately $68 million over 30
years, Stanley sought to find a better solution to the funding problem.

After
months of hard-nose negotiations and a lot of convincing of her
legislative colleagues, Stanley was able to pass a more equitable way
to allocate the financial responsibility for the transferred employees.
Instead of being swamped by the entire liability, regional systems are
only responsible for a small portion of the cost. Most are now offset
by the transfer of county real estate and other assets to the
Commonwealth.

We also
thought it was important to allow the current county retirees to remain
in their existing system to avoid the stress that often accompanies
change," said Stanley. "I know that there are nearly 300 Essex County
retirees who continue to enjoy the convenience of dealing with a local
retirement system. The familiarity of the local staff is a true benefit
to our retirees.

"This
was a three and a half year effort to properly address the issue of
county abolition, while maintaining top-notch retirement systems. It
was a great challenge and an opportunity to learn, but I am glad it is
now complete."

Representative, so are the retirees!

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