JANUARY 2006 - Legislative Package Advances - Beacon Hill was a hotbed of activity in late fall as the Legislature wrapped-up the first year of its two-year session. During the session, progress was made on several Association sponsored bills.

Option C Fight Continues

Association lobbyists continue to work closely with members, who retired under Option C prior to July 1, 2004, in an attempt to move the Legislature to retroactively adjust their benefits. A 2004 change in the mortality table used to calculate Option C benefits revealed that the previous table had been significantly out of date and flawed in its calculation.

The previous table, based on 1928 mortality rates, incorrectly reduced one's pension when calculating the Option C benefit. In some cases, the calculation was off by 10-20%, depending upon the date of retirement and ages of the retiree/beneficiary.

When the law was changed in 2004, it took effect from July 1 forward and was not retroactively applied. Last year, the Association filed legislation that would have mandated a recalculation of retirees' Option C pensions to account for the updated table.

Scores of members, such as Edward Canney, have been assisting Association officers in our lobbying efforts on the bill, S1565. Beyond contacting his local legislators, Canney, a retiree of the Department of Environmental Protection, has developed a funding analysis of the issue, which has been forwarded to retirement officials.

"Last year everyone was surprised by the severe difference in the two mortality tables. There is no question that Option C benefits over the past 20 years have been miscalculated," explains Association Legislative Chairman Bill Hill, himself and Option C retiree. "While we feel this is an important issue and would like the Legislature to act quickly, we understand that the wheels of government turn slowly at times. This is a new and very complicated issue that is going to take time to grapple with."

The Public Service Committee, in a step acknowledging the controversy surrounding the mortality table, reported a bill out this fall that allows those, who retired between July 1, 2004 and December 27, 2004 and chose Options A or B, to recalculate their pension benefit under the new Option C table. The bill, H4424, was signed into law as Chapter 143.

"Every attempt was made to have the bill reach back further than July 1, 2004, but the Legislative Leadership did not feel comfortable with the financial data they had been given. Estimates have the cost somewhere between $56 million and $200 million a year, too large a range," continued Hill. "This is a very important issue to a number of members and we are not about to give up the fight. Further study is underway and we will be filing a new bill by the first of the year."

Insurance Bills Reviewed

As of press time, the Public Service Committee was engaged in a comprehensive review of the legislation remaining before it. By December 1, fifteen Association sponsored bills were still before the Committee, with eight bills having been reported favorably.

On November 17, the Committee held a public hearing on all nine of the Association's bills relative to health insurance.

Paramount among the bills is S1540, filed by Senator Richard Moore (D-Uxbridge), which would reinstate the Medicare Part B reimbursement that had traditionally been paid to those retirees insured through the state Group Insurance Commission. The bill, which is strongly opposed by Governor Romney, would mandate that the GIC begin to pay the state's share of the Part B premium that was eliminated in 2002.

Quincy Senator Michael Morrissey has filed a similar bill (S1564) that would require a Part B reimbursement at the local level for municipalities that accept Section 18 (mandatory Medicare). Association officials point to the millions saved by local government as a result of Medicare enrollment to make the case for reimbursement.

Association lobbyists are also advocating for two bills that would alter the GIC itself. S1435, filed by Senator Scott Brown (R-Wrentham) creates a mandatory prescription drug appeal process. A second bill, S1629, sponsored by Senator Marian Walsh (D-West Roxbury), grants the Association with the right to chose its own retiree representative to serve on the GIC, a position now controlled solely by the governor.

GIC officials have endorsed the Association's bid to raise the basic life insurance offered by the state from $5,000 to $10,000. The bill, H320, carried by Representative Thomas O'Brien (D-Kingston), is high on the priority list of many members. Municipalities already have the ability to raise life insurance levels for local retirees.

Testimony on bills relative to the retention of a surviving spouse's health insurance (S1541), municipal dental insurance (H275), privacy rights (H281), and the reinstatement of health insurance benefits (S1626) was also heard by the Committee on November 17.

"We anticipate that a number of bills will be released by the Committee in mid-December. When the Legislature engages its formal business in January, we are planning a major push for action on a number of our bills," said Association Legislative Liaison Shawn Duhamel.