In May, Jehlen heavily lobbied for, and passed, a bill (S2292), which establishes a minimum pension of $15,000 for longtime public employees, who had at least twenty-five years of creditable service. The bill, which is a local option for city, town, county, regional, and district retirement systems, will be automatic for all state and teacher retirees. While this is a brand new benefit at the local level, a $10,000 minimum pension has existed for state and teacher retirees since 2000.

S2292 is the committee draft of legislation, filed by the Association and sponsored by Representative Tom O’Brien (D-Kingston) and Senator Tom McGee (D-Lynn). At press time, the bill is under review by the House Committee on Ways and Means.

“Even though Pat Jehlen is new to the Senate, she has the benefit of having served in the House for the past several years,” commented Association Legislative Liaison Shawn Duhamel. “What is impressive is how quickly the Senator has learned our issues and can articulate the importance of acting on important legislation to her colleagues. Without a doubt, she has become a great ally in the Senate for our members.”

Time Challenge

The close of formal business on July 30 presents a challenge to Association lobbyists, who find themselves working against the clock in their attempts to advance the Association’s legislative package. Led by Legislative Chairman Bill Hill, the team has been working feverishly to move several bills through the process in the remaining time.

As members are aware, while the Legislature remains in session through the first Tuesday in January, it only holds twice weekly informal sessions from August to January. Occasional formal sessions can be called by the Legislative Leadership to address budgetary matters or other issues of wide importance to the Commonwealth.

“We know going into the session that in most cases we are working against the clock. That is the nature of the schedule and you just need to find ways of working around the time constraints,” explains Hill. “Since the Legislature continues to work informally, you still have a chance to pass a bill after July 30. However, the problem arises if Governor Romney opts to veto the bill.”

On the other side of the aisle, the House Ways and Means is reviewing our bill (H292) that increases the minimum pensions of survivors of accidental disability retirees from the current $6,000 to $8,000 annually. A similar bill (H291), which raises the minimum pension for survivors of active employees, who die of non work-related causes, from $3,000 to $6,000 is before the Public Service Committee.

Association leaders continue to push for recognition of those retirees, who retired under Option C prior to July 1, 2004 and, therefore,  had their pensions calculated under the old 1928 mortality table. While a number of senior legislators have championed the issue, House and Senate budget writers continue to balk at the high anticipated cost of applying the new tables to those retired before July 1, 2004.

At  press time, Association General Counsel Bill Rehrey continues to assess the feasibility of  seeking relief for Option C retirees in the courts. Those members, who are impacted by the change in mortality tables, can learn the latest developments on this issue by monitoring the Association’s website and hotline.

GASB Update

Our healthcare liability funding bill (H4655) has been divided in half by the Joint Healthcare Financing Committee. While the portion, that allows municipalities to establish a retiree healthcare funding schedule, has been reported out favorably (H4887) and is currently before House Ways and Means, the second half, which requires the state to do the same, is still being reviewed by the Healthcare Committee.

As a quick reminder as to the need for this legislation, the Governmental Accounting Standards Board (GASB) establishes accounting standards that states and municipalities adhere to in their financial reports. Recently it issued a new set of standards (Statement 45) which requires that beginning July ’07, states and municipalities must report the future cost of retiree healthcare benefits. While not mandated, Mass  officials will be compelled to show in their financial reports how they plan to pay these costs according to a schedule that spans several years (i.e., 30 years).

In addition to establishing retiree healthcare funding schedules, the healthcare liability fund bills (H4655 and H4887) provides for annual appropriations to a healthcare fund, which, at the state level, would be managed by the PRIM (Pension Reserves Investment Management) Board and may locally be managed by the respective retirement board, PRIM or town officials. Also, any funds, which may be received from the federal government under the Retiree Drug Subsidy (Medicare Part D), would at the state level, and may locally, be deposited into the healthcare fund.