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SOCIAL SECURITY OFFSETS ON TABLE

Overhaul On Horizon In 2010

MAY 2009 VOICE: In the midst of the worse economic conditions since the Great Depression, plans are underway in Washington, D.C. to act on Social Security reform early in 2010.

Despite having received overwhelming support in the past two Congresses for a full repeal of the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), it has become evident that any change in Social Security would take place as part of a larger “reform” of the system.

STATE KEEPS REIGNS ON INSURANCE RATES

Medicare Extension Costs Drop

MAY 2009 VOICE: A glimmer of good news has come to public retirees and employees who are insured under the state-run Group Insurance Commission (GIC). Once again the GIC has come in with insurance rates that are well below state and national averages.

JULY COLAS VOTED

Despite Pension Funds' Setback

MAY 2009 VOICE: Despite suffering huge pension fund losses as a result of the 2008 market meltdown, members of the Commonwealth’s 104 local retirement boards expressed faith that the market would recover by voting three percent July COLAs for their retirees.

LOCAL INSURANCE CHANGES LOOM

Proposal Would Mandate Medicare Enrollment

MAY 8, 2009: A special legislative commission, charged with studying municipal reform measures and new local revenue sources, has issued a report that calls for changes in local health insurance plans.

If passed, each local community not currently enrolled in the GIC would be forced to conduct an analysis of their local insurance costs. If local costs are higher than the GIC, on a per enrollee basis, the coalition bargaining process would be triggered and benefits renegotiated in order to lower local insurance costs. Retirees would have a seat at the bargaining table under this proposal.

NO RADIOLOGY COPAYMENTS FOR MEDICARE RETIREES

Emergency Room Payments Remain at $25

MAY 2009: Retirees insured under the state’s Group Insurance Commission (GIC) and enrolled in the Medicare supplement plans  will not be subject to the new $75 radiology copayment that takes effect on July 1. In addition, GIC officials have opted to maintain the current emergency room copayments for Medicare retirees, instead of the new $75 copayment being charged to enrollees of the non Medicare insurance plans

ALL EYES ON BEACON HILL

Budget Debate Begins, While Reforms Continue

APRIL 27, 2009: The Massachusetts House of Representatives begins debate on the Fiscal Year 2010 state budget this week. While the budget does include a full 3% COLA for state and teacher retirees and does not change state retiree insurance contribution rates, our Association is closely monitoring developments on Beacon Hill.

Association officials are deeply concerned about a proposed 25% reduction in local aid, along with a $1.9 billion cut in overall state spending. Tax receipts have plummeted in the past six months as unemployment numbers worsen. What long-term impact the recession may have remains to be seen.

House Budget Includes 3% COLA

No Change to Retiree Health Insurance

APRIL 15, 2009: The House Committee on Ways and Means has filed a Fiscal Year 2010 budget proposal that contains a full 3% cost-of-living adjustment for retired state employees and teachers. Support for the COLA, which is scheduled to be paid in July, comes despite a looming $4 billion deficit for FY10.

House budget writers, led by Chairman Charles Murphy (D-Burlington), have proposed an increase in the health insurance contributions paid by active stare employees. Under the House proposal, active state workers would contribute 30% toward their insurance premiums. However, state retirees are held harmless, as our any municipal retirees/employees entering the GIC through coalition bargaining.

PENSION REFORM DEBATE UNDERWAY

Retirees Not Impacted By Changes

APRIL 13, 2009: Legislative leaders are quickly advancing legislation that will redefine some aspects of the Massachusetts defined benefit pension plan. Know as “pension reform”, this legislative action follows several year’s worth of media expose’ that allege pension abuse by a small number of individuals “gaming” the system.

While the proposed changes do not impact the pension benefits of any current retirees, some changes may impact current public employees. The Senate passed its version (S2026) of a pension reform bill on March 31 and the House is expected to debate a similar bill (H4054) on Tuesday, April 14.

GIC OPEN ENROLLMENT NOW UNDERWAY

APRIL 11, 2009: The state’s Group Insurance Commission (GIC) is now holding its annual open enrollment period, during which retirees and employees are allowed to make changes in their insurance coverage (effective July 1, 2009). With nearly 300,000 state and local retirees and employees now insured under the state plan, a large portion of Association members are impacted.

During open enrollment, which runs from April 13 to May 15, 2009, the GIC will hold 18 health fairs across the state. The health fairs, attended by GIC and insurance company officials, provide an excellent opportunity for members seeking additional information about their insurance coverage to speak directly with the people responsible.

RETIREE STIMULUS PAYMENTS BEGIN IN MAY

MARCH 28, 2009: Vice President Joseph Biden announced Friday that federal stimulus payments to Social Security recipients will take place in May. The one-time $250 payment, included within the $825 billion American Recovery and Reinvestment Act, will be made in a separate check and is payable to all retirees who receive Social Security benefits.

Public retirees, who do not receive a Social Security benefit, will receive a $250 tax rebate paid by the IRS. Unfortunately, non Social Security retirees must wait until they file their 2009 taxes (filed in 2010) in order to receive the stimulus payment.

LEGISLATIVE WORK UNDERWAY

Spellane & McGee Chair Public Service

MARCH 20, 2009: As state leaders ramp up efforts to close a growing deficit for the current FY09 fiscal year, House and Senate budget writers work to assemble the Fiscal Year 2010 budget, while Legislative committees begin their work on the thousands of pending bills.

With monthly revenue collections continuing to fall lower than anticipated, current estimates set the remaining deficit at $500 million, with the potential to grow to $1 billion by the end of June. Roughly $2.5 billion has already been cut from the FY09 budget, which began last July. New House Ways and Means Chairman Charles Murphy (D-Burlington) is working closely with his Senate counterpart, Senator Steven Panagiotakos (D-Lowell) to craft the FY2010 budget with an anticipated budget shortfall surpassing $4 billion.

IMPORTANT NOTICE TO MEMBERS OF THE STATE RETIREMENT SYSTEM

Dear Members of the State Retirement System: You will shortly receive a ballot for a very important election at the State Retirement Board.

Theresa McGoldrick, who sits along with Ralph White as one of the two elected members on the State Retirement Board, is running for reelection for a new three-year term. Because elections are staggered, Theresa’s is the only election this year.

STATE HOLDS DOWN INSURANCE RATES

OME Plan Costs Drop

MARCH 7, 2009: Officials with the state’s Group Insurance Commission (GIC) have announced the insurance rates for FY10, which begins on July 1. The average increase across all GIC sponsored plans is 3.1%, with an actual price reduction for the Optional Medicare Extension (OME) plan.

While insurance costs have risen across the Commonwealth and country between 5-6% on average, the GIC has once again managed to come in with significantly lower increases. This is good news for the 325,000 state retirees and employees, retired teachers, and retired and active local employees now enrolled in the state insurance plans.

WEP AND GPO REPEAL GAINS SUPPORT IN WASHINGTON

MA Delegation Cosponsors Bills

FEBRUARY 27, 2008: Senator Dianne Feinstein (D-CA) has reintroduced her bill to repeal the dreaded Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). The bill, S484, has ten initial cosponsors and is now before the Senate Finance Committee.

John Kerry (D-ME), Susan Collins (R-ME), Sheldon Whitehouse (D-RI), Richard Durbin (D-IL), and Bill Nelson (D-FL) are among the more notable Senators, from key retiree states, sponsoring the bill. Kerry remains chairman of the Subcommittee on Social Security, and is now the 5th ranking member on the Senate Finance Committee, which now holds S484 under review.

ICE STORM OF 2008 WILL NOT BE FORGOTTEN

Worse Than Blizzard of ‘78

In the annals of Central Massachusetts, the ice storm of this past December 11-12 is rated as worse than the Blizzard of ’78 in severity and hardship for many members.

With little warning, other than expected freezing rain on the eve of December 11, members were awakened during the night by a widespread power outage and the sound of trees snapping. When dawn arrived it appeared that he world had returned to a veritable Ice Age. And winter was still 10 days away.

STIMULUS PAYMENTS & TAX BREAKS COMING FOR RETIREES

FEBRUARY 18, 2009: Under the American Recovery and Reinvestment Act (Stimulus Package) signed by President Barack Obama on February 17, retirees who are now receiving Social Security will receive a one-time stimulus check of $250.00.

Retirees who are currently working will be treated the same as other wage-earners, specifically by a reduction of their tax withholdings up to a total of $400 ($800 per couple). And retirees who are neither working nor collecting Social Security will be applying to the Internal Revenue Service (IRS) for their $250 payment. 

PUBLIC RETIREES INCLUDED IN STIMULUS

FEBRUARY 16, 2009: With the inclusion of non-Social Security retirees in the federal stimulus bill now before President Obama, Massachusetts Senator John Kerry has won a crucial fight on behalf of public retirees.

With the help of several members of the state’s Congressional delegation, Kerry was able to win Conference Committee approval of his amendment to grant public retirees the federal stimulus payment. The payment, which is contained within the Make Work Pay provisions in the $787 billion legislation, equals $250 per retiree.

KERRY FIGHTS TO INCLUDE RETIREES IN STIMULUS

Members Urged to Contact Federal Representatives

FEBRUARY 10, 2009: Massachusetts Senator John Kerry is fighting to include retired public employees in the federal stimulus bill that is before Congress.
Contained within the vast bill is a provision that, if passed into law, will grant Social Security recipients a one-time $300 stimulus payment. This payment is in lieu of the federal income tax cut that workers are about to receive on their payroll withholdings.

WHITE RESPONDS TO PENSION FUND LOSS

Defends PRIT’s Investment Record

FEBRUARY 5, 2009: Much has been made about the investment loss of the Commonwealth’s Pension Reserves Investment Trust (PRIT) Fund in Year 2008.

Overall, the Fund lost $15.9 billion in 2008, falling from $53.7 billion to $37.8 billion, a 29.4 percent fall.

2009-2010 LEGISLATIVE PACKAGE

COST OF LIVING

1)  Increase Maximum COLA Base (Senator Walsh and Senator Jehlen)

Currently, the cost-of-living-adjustment (COLA) is determined by applying the percentage increase (i.e., 3%) to an eligible retiree’s pension, up to their first $12,000 of retirement benefits, which is the maximum COLA base. The $12,000 maximum base was established in the landmark COLA legislation (Chapter 17) enacted in 1997. Our efforts to increase the $12,000 base, during the 2007-2008 legislative session, have been well chronicled.

PATRICK BACKS 3% STATE/TEACHER COLA

Local Acceptance Now Underway

 

JANUARY 30, 2009: Governor Deval Patrick has included a 3% COLA increase in his FY 2010 budget proposal. The COLA, which will take effect on July 1, now must be approved by the House and Senate as part of the budget. If passed, this marks the thirteenth consecutive year in which a COLA has been granted by the state.

MUNICIPAL GIC: MEDICARE PART B KEY BARGAINING CHIP

JANUARY 1, 2009: Over the past eighteen months, scores of Massachusetts cities, towns, and various other governmental entities have been in open negotiation over whether or not to enroll local retirees and employees into the state’s Group Insurance Commission (GIC) health insurance plans.

These communities are using a process established by Chapter 67, Acts of 2007, commonly referred to as Section 19 or coalition bargaining. Under coalition bargaining, local retirees negotiate their health insurance benefits together with active city/town employees as part of a public employee committee (PEC). A weighted vote of 70% of the PEC (retirees have an automatic 10% vote) and approval of the governing authority is needed to join the GIC.

RELIEF FOR LOCAL RETIREMENT SYSTEMS

Association Supports Changes In Funding Schedules

JANUARY 22, 2009: At the core of any proposal for pension benefit improvements is its impact on the retirement system’s pension funding schedule. For the past 20 years, local retirement boards have been administering their systems in compliance with a pension funding schedule.

GOVERNOR URGES PENSION REFORM

Appoints White to Commission

JANUARY 16, 2009: In his annual State of the State Address, Governor Deval Patrick repeated his call for so-called pension reform, urging the Legislature to work with him to enact changes this year. Retirees should be aware that current pension benefits are protected by law and cannot be altered or repealed.

STATE GIC HALTS TALK OF MID-YEAR INCREASES TO COPAYMENTS/DEDUCTIBLES

JANUARY 10, 2009: State insurance officials have halted talk of mid-year increases in copayments and deductibles, which had been eyed to cover recent budget cuts. In October, $32 million was cut from the Group Insurance Commission’s FY09 Budget.