While interest is high amongst many key legislators to act favorably on a number of retirement bills, the likelihood of our bills being addressed prior to the completion of the budget was slim. Much to the Association’s surprise, the House Committee on Ways and Means released H-319, the so called "Needham" bill.

Despite his heavy workload concerning the budget, House Ways and Means Chairman Paul Haley (D-Weymouth) chose to release the bill during an executive session on September 28. It was one of only six bills acted on by the Committee and was promptly placed on the House calendar for action the following day.

The corrections bill had been engrossed by both the House and Senate during the last legislative session. Differences between the two branches over the exact wording of the bill could not be worked out by the end of the session in January, forcing the bill to die.

Under the bill, sponsored by Representatives Thomas McGee (D-Lynn) and Timothy Toomey (D-Cambridge), the Commonwealth’s 106 retirement boards are granted the discretion to waive the need for retirees and active employees to repay the retirement system in cases where pension and contribution errors are discovered. Under current law, retirement systems have no choice but to collect money from active employees and retirees when mistakes are discovered.

"A number of organizations have been working on this issue for the past several years. We were successful in getting early action on this bill in the Public Service Committee and the House Committee on Counties, but we did not expect formal House action until after the budget was complete," explains Association Legislative Liaison Shawn Duhamel. "I think the fact that passage of this bill is overdue had some bearing on the Chairman’s decision to expedite things."

As of press time, it is unclear how quickly the Senate will act on the bill. Senate Ways and Means Chairman Mark Montigny (D-New Bedford) is said to have an interest in the bill’s passage. During the last session, the Senate altered the language of the bill to require that only mistakes discovered between January 1, 1996 and January 1, 1999 could be waived by the board. House leaders found the language change undesirable, resulting in the impasse at the end of the last session.

Governor Spearheaded Issue

In late 1997, the Needham Retirement Board discovered, through an audit of their system, that a retiree who had been retired for seventeen years had mistakenly been overpaid approximately $20,000 in pension benefits. The Board, acting under the existing law, notified the retiree that he had been overpaid and that he would be held responsible for the repayment of the money.

Shocked at the prospect of owing the retirement system money, the retiree contacted a Boston area television station, which quickly took up the elderly veteran’s cause. The ensuing media frenzy brought the issue to the attention of Governor Paul Cellucci, who filed corrective legislation waiving the requirement for repayment.

Since that time, it has been discovered that a large number of active employees have accidentally been contributing the wrong percentage of their income towards their public pension. For instance, hundreds of employees in Barnstable County and New Bedford have been found to have had the wrong amount withheld towards their pensions. Again, the current law requires the retirement system to collect the money owed from the employee.

Since most of the errors were not found until the employee attempted to retiree, most retirement boards have established repayment schedules which allow the member to retire prior to the money being fully repaid. During repayment, the retiree would receive a reduced pension benefit until the full amount is recovered.