Legislative watch

Massachusetts
Federal legislative update

Massachusetts

For more information on Massachusetts bills: To learn about proposed legislation that could affect the MTRS and its members, you can obtain the text of any Senate or House Bills through the General Court’s website.

A warning about pending legislation: In simple terms, a bill is an idea that has been presented to the state Legislature for possible action. The process is complicated, and it does not always lead to enactment of the bill. The MTRS urges caution in making retirement plans based on pending legislation because bills:

• must pass both houses and be signed by the Governor to become law,
• may be amended,
• may not pass,
• may take years to pass, and
• may never become law.

For information on how bills become law, please see Lawmaking in Massachusetts.

This legislation filed by Governor Patrick proposes further pension reforms to achieve the following objectives:

• Update the system to reflect demographic changes, such as the fact that people are living and working longer;
• Eliminate abuses, through anti-spiking measures, extending the number of years used to calculate pension benefits, and increasing scrutiny of legislation benefiting individual employees; and,
• Address fairness issues, through updating purchase of creditable service and buyback provisions, eliminating early retirement incentives, pro-rating benefits based on employment history, eliminating the right to receive a pension while receiving compensation for service in an elected position, and allowing retirees who married a person of the same sex within the first year after it became legal to change their retirement option in order to provide a benefit to their spouse.

Most of the provisions in the bill became law under Chapter 176 of the Acts of 2011.

H1 (section 37): Governor Patrick recommends a 3% cost of living adjustment (COLA) for retired members of the state and teachers' retirement system as part of his FY2012 state budget. The COLA will be applied to the first $12,000 of the retirement benefit, for a maximum increase of $360 per year or $30 per month.

This bill would raise, from $10,000 to $15,000, the minimum pension benefit for state and teachers’ retirement system retirees who have at least 25 years of service.

The provisions of this bill became law under section 47 of Chapter 176 of the Acts of 2011.

This legislation would allow members to purchase up to 4 years of creditable service for any periods teaching at a nonpublic school.

The legislation would increase the COLA base from $12,000 to $16,000 upon its passage and index future COLA base increases to a percentage of the maximum Social Security benefit over the course of the next 16 years. The current maximum Social Security benefit is just over $25,000 and it increases every year by the increase in the Consumer Price Index (CPI).

In addition, the legislation provides that the COLA would be the CPI or 3%, whichever is greater (currently, it is the CPI or 3%, whichever is less). Finally, the bill would extend the pension funding schedule from 2023 to 2040.

This legislation would allow a school administrator to purchase up to 3 years of service for any period or periods of work experience in the business field.

Federal legislative update

March 6, 2012

Once again a bill has been filed in the United States House of Representatives to repeal the Government Pension Offset (GPO) and the Windfall Elimination Provisions (WEP). The bill H.R. 1332 was re-filed by Congressman Howard McKeon of California and has 156 co-sponsors as of March 6, 2012. The number of co-sponsors is significantly less than the previous sessions when over 300 members of Congress had signed on as co-sponsors.

The prospect for passage remains remote due to the ongoing deficit discussions in Washington. As we have noted in the past, the cost associated with repealing these provisions has been estimated at over $80 billion over the next ten years. Please visit H.R. 1332 for more information.