NOVEMBER 1998 - Pop-up/Income Tax Exception Also Pending - They are known as non-contribs, or non-contributory retirees. These retirees are not members of the contributory retirement systems and are not eligible for benefits paid for through the pension fund.

Most of the nearly 4,000 non-contribs are career public employees, who are veterans who worked prior to July 1,1939, or were municipal employees hired prior to the adoption of the contributory pension system. Most are veterans of World War II, who left their jobs to join the service in the early 1940’s.

The pre-1939 veterans all retired under the provisions of Section 58, MGL Chapter 32. Section 58 stipulates that any veteran, with at least 30 years of service, who worked the public sector prior to July 1,1939 can opt for a non-contributory pension upon their retirement. They then received a refund of their pension contributions and were granted a 72% non-contributory pension.

Over the past year, two major pieces of legislation were passed into law that greatly benefit retirees. Unfortunately, both the new COLA law (Chapter 17) and the Option C ‘Pop-Up’ do not apply to non-contributory retirees. Inadvertently, both laws are worded in such a way that the benefits cannot be extended to non-contribs without further legislation being passed.

The pension benefits of non-contribs are funded by local tax dollars through the budget of the agency from which the member retired. Upon receiving their refunded contributions, non-contribs forfeited their membership in the retirement system.

A bill, H-5469, was filed last spring to allow the municipalities, districts, authorities, and counties to provide COLAs for their non-contribs. The bill has passed the House and is expected to be acted on in the Senate this fall. Once passed, the bill allows municipalities to pass the COLA retroactively to July for non-contribs.

“The exclusion of non-contribs from the COLA and the “Pop-Up” laws was completely unintentional. When the COLA law was passed we (Association) felt all retirees were covered, but the state has ruled otherwise,” said Association Legislative Liaison Shawn Duhamel. “We have been working with Senator Moore (D-Uxbridge) to move the bill through the Senate Ways and Means Committee sometime over the next several weeks.”

Action to amend the Option C “Pop-Up” law may be delayed until the start of the next legislative session is January. Legislative leaders are unlikely to take up the issue during the informal sessions that remain this year.

“Non-Contribs who chose Option C are understandably upset that they were not included in the new law. When the change went through in the budget, there was no way to amend it without derailing the entire bill. Non-contribs will be included, it just may take a little time,” added Duhamel.