Special commission recommends changes in health benefits for future retirees

December 21, 2012

Mass. Teachers Association

Labor representatives and the association representing retired public employees in Massachusetts have signed on to recommendations made by a special commission that protect current retirees from changes in post-retirement health benefits but do make changes for certain current and future employees to make the system more sustainable. The MTA, the Massachusetts AFL-CIO and the Massachusetts Retiree Association all sided with the majority in the 11-1 vote, which was taken on December 20 after months of meetings and negotiations. A final commission report, including these and other recommendations, is expected to be released in January.

“The retiree health care system has been a ticking time bomb for many years,” said MTA President Paul Toner. “Unlike the pension system, future retiree health benefits have never been funded, and the unfunded liability is now estimated at $46 billion over 30 years. To put this in context, that is more than all state spending on local and state services in a year.”

The commission was co-chaired by former MTA President Anne Wass. The only “no” vote was cast by the Massachusetts Municipal Association representative. The MMA opposes the proposed limits on municipal leaders’ ability to make deeper cuts in the retiree health benefits.

“We and the other labor and retiree representatives were convinced that if modifications are not made, we risk jeopardizing health care benefits for both current and future retirees and employees,” Toner said. “The consequences of failing to grapple with this massive liability could include cuts in health benefits or other compensation for active employees, cuts in benefits for current retirees and significant staff layoffs.

“Changing benefits is just one side of the equation,” Toner said. “Municipal and state governments must do a much better job of setting aside funds for their future health care obligations, as they do for pensions.”

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Mass. Teachers Association