The Honorable Michael Brady, Senate Chair
The Honorable Jerald Parisella, House Chair
Joint Committee on Public Service
State House, Boston

Dear Chair Brady, Chair Parisella, and Members of the Committee,

On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association submits the following comments on bills that the Committee heard on September 26. We appreciate the Committee’s consideration of local government’s position on these important matters regarding retirement.

The MMA opposes several bills that would increase a public employee’s retirement allowance, raise caps on earnings, lower the years of creditable service required to retire, or change eligibility to apply for certain retirement allowances. This legislation would untenably raise municipal pension liability and other-post-employment benefits (OPEB) liability, which is double that of the state at over $30 billion, to even greater insurmountable levels. We strongly oppose any legislation that would add to these liabilities.

• H. 2203, An Act increasing the minimum pension for public retirees, would increase the amount of a public employee’s retirement allowance for superannuation, accidental disability or ordinary disability from $15,000 to $24,000, and lower the requisite years of creditable service from 25 to 20. Increasing retirement allowances and lowering requisite years of creditable service are both actions that significantly affect municipal pension and OPEB liability. We ask the Committee to not report out this bill.

• H. 2272, An Act relative to certain Option B and Option C retirees, and S. 1533, An Act relative to retirement options for retirees, would authorize increases in retirement allowances for retirees who retired prior to July 2004 and their survivors who are receiving lesser retirement allowances under the terms of Option B (annuity protection) or Option C (joint survivor allowance), or a survivor benefit under Chapter 32. Increases to the specific dollar amounts for Option B and Option C retirees under the terms of these bills would add to the already extraordinary municipal pension and OPEB liabilities. We ask the Committee to not report out this bill.

• H. 2318, An Act regarding post-disability retirement earnings, would increase the cap on earnings by a disabled retiree to an amount, when added to the member’s retirement allowance, is equal to the amount of regular compensation which would have been payable to such member if such member had continued in service in the grade held at retirement plus $200,000. The current law caps earnings at $15,000 over the amount of regular compensation. This bill would add to the already exorbitant municipal pension and OPEB liabilities. We ask the Committee to not report out this bill.

The MMA supports H. 2213, An Act relative to post-retirement earnings of public retirees, which would amend G.L. Chapter 32, Section 91 governing payment of pensioners for services after retirement to increase the number of hours that a retired public employee may work for a public entity in a calendar year, from 960 hours to 1,200 hours. Other bills before the Committee would also increase hours or leave the earnings cap of $15,000 over the salary that is being paid for the position from which the individual retired:

• H. 2243, An Act relative to the cap on work hours for retirees would increase the number of hours from 960 to 1,500 annually and keep the earnings limit in place.

• H. 2266, An Act relative to capping payment of pensioners for services after retirement would increase the number of hours from 960 to 1,200 annually and keep the $15,000 cap in place.

• S. 1578, An Act relative to post-retirement earnings of public retirees would eliminate the hours limit on public retirees doing work for public entities, leaving in place only the earnings limit.

A substantial portion of public employees in Massachusetts are retiring, which is creating gaps in the workforce. We are facing a shortage of skilled and experienced workers in a variety of professions, combined with a lower interest in pursuing a career in public service. Notably, finance officers, police officers, engineers and those in skilled trades are declining in numbers. Post-retirement employment, however, can reduce workforce shortages and facilitate succession planning. It can also reduce costs for public employers and help with projected labor shortages as our aging workforce retires. Older workers can bring institutional knowledge, skills and experience to the workplace, and public employers need access to part-time workers and those with flexible work arrangements, often found among older workers.

Both the House and the Senate passed similar legislation last session, but the Governor vetoed the enacted bill raising concerns that the bill went too far in allowing employees to work nearly full-time while collecting a pension without “any corresponding changes to improve the current practice.” The MMA supports increasing the number of hours a public retiree may work in order to address workforce gaps and shortages, and requests to work with the Committee on language that will address the administration’s concerns while allowing post-retirement employees to fill crucial positions in the public sector workplace. If you have any questions or need additional information, please do not hesitate to contact me or MMA Senior Legislative Analyst Lisa Adams at 617-426-7272 at any time.

Thank you.

Sincerely,

Geoffrey C. Beckwith
Executive Director & CEO