After months of lobbying and speculation from the various public employee unions, the Committee favorably released H-4466. The new bill combined over a dozen retirement proposals, previously heard by the Committee, into a single comprehensive bill. Senator Brian Joyce (D-Milton) and Representative Paul Casey (D-Winchester) chair the Committee.

"This really caught everyone completely by surprise. None of the union representatives that I have spoken with would have guessed the Committee would report this bill out as quickly as they did," said Association Legislative Liaison Shawn Duhamel. "It has been difficult for people to get a handle on exactly what is happening because there are several different bills floating around that do similar things."

During the same hearing the Committee released favorably H-712, the so called "75-25" bill for public safety officers. Only municipal police and county correction officers (who are not members of the State Retirement System) are covered under H-712. Firefighters along with all other Group 4 employees are included in the "75-25" section within H-4466.

Under H-712 and H-4466, those public safety officers who are included in the proposal can opt to retiree after 25 years of service with 75% of their highest three year average. Those who choose to participate in the plan would be required to contribute 12% a year for at least three years prior to retiring. All new employees would be required to participate.

Cost Analysis Underway

Longevity Is Key

Due to the cost restraints that are expected for the broad ranging revision of the retirement formula as proposed by H-4466, legislative sources say that the emphasis may shift towards a bill focusing on long-term employees. Those involved in the cost analysis of the proposals expect the cost prohibitions to lessen as the scope of the bill is tightened.

This sits well with Group 1 employees who contend that our retirement formula is flawed. Employees can begin their career at an early age and still not be able to retire with a decent pension after 30 years, while people who come into the system at an older age receive greater credit.

There is a bill sponsored by the Mass. Association of Contributory Retirement Systems (MACRS) which would create a special study commission to develop a new Group 1 retirement formula which would modify the age penalty for those who enter the system at an early age. The bill, H-1273, is currently before the Senate Committee on Ways and Means.

Preliminary numbers developed by the State Retirement Board show there are 7,185 active state employees in Group 1 with more than 25 years of service. Under Group 2, there are 319 active employees with more than 25 years of service.

When looking at the number of state employees with an excess of 30 years of service, the numbers dramatically decline to 2,017. The majority of these employees (1,662) have between 30-34 years of service and are above age 50.

"When you narrow the focus down to looking at long-term Group 1 employees there is a significant drop in the number of people we are looking at. As the number of participants drops, so do the cost prohibitions," said MACRS President Kevin Regan. "A good number of the people with 30 years or more of service are already at or close to the 80% maximum pension on their own. These people would not need to take advantage of an ERI, thus further reducing the cost."