Flanagan: State pension system reformed under Senate bill

Reforming state government continues on Beacon Hill. A week after passing comprehensive legislation to overhaul the state transportation system, the Senate last week continued to push its reform agenda with unanimous approval of a bill that will tie off loopholes in current pension laws to end abuses and save taxpayer money.

The state's pension system is an important benefit for state workers who chose generally low-paying careers in public service over the private sector. The average pension for Massachusetts public employees is approximately $24,000 a year. There are examples, however, of individuals who exploit loopholes to increase pension payments at a high cost to the state.

The Senate legislation is just the beginning of important fixes to state pension laws. The bill also directs the currently-established Blue Ribbon Commission on Pension Reform to review broader issues within the system, such as capping large pension payments, and make comprehensive reform recommendations to the Legislature by September 1.

The Senate legislation contains seven common-sense reforms of our public pension system: 1. Re-defines "regular compensation" to exclude housing allowances, use of motor vehicle and travel; 2. Removes the "one day, one year" provision that allows elected officials to claim an entire year of credible service for working one day in

a calendar year;

3. Eliminates the ability of municipal officials to receive pension credit for service in an unpaid position;

4. Reforms the current accidental disability retirement benefit for individuals who are injured while temporarily filling in for their supervisor;

5. Removes a provision that allows elected officials to claim a "termination allowance" based on the failure to be nominated or re-elected;

6. Aligns MBTA employee pension with the state system. Eliminates the 23 years and out for future T employees. (This reform was also included in the Senate transportation reform bill passed last week);

7. Reforms dual-service pensions so that an individual cannot combine the compensation from two positions to artificially increase one's pension. An individual who is a member of two or more systems will receive benefits as if retiring separately from each system.

The Senate pension reform package was strengthened by several amendments that were approved on the Senate floor, including one that prevents local and state employees as of January 1, 2010, who make less than $5,000 from receiving pension credit. Another raises the vesting years for future elected officials from six to 10 years, bringing them on par with all other public employees. The bill now goes to the House of Representatives for further action.

My last article focused on the then upcoming transportation reform package, which has since passed in the Senate and heads to the House. Two weeks ago, the Senate passed comprehensive reform legislation that consolidates multiple agencies into an independent authority and eliminates the MBTA's "23 and out" retirement policy. The bill eliminates the Turnpike Authority, streamlines communications, and creates a more efficient and cost-effective system under a unifying agency called the Massachusetts Surface Transportation Authority (MSTA), potentially saving the Commonwealth up to $6.5 billion over 20 years. The MSTA sheds the many layers of bureaucracy in the current system by consolidating and sharing existing resources and services. In the first two years of the Senate reform plan, the new system will see a surplus of $71.7 million in year one and $25.5 million in year two, based on reforms alone with no additional revenues attached.

Under the new Authority, the current system is reduced to two divisions: Roads and Bridges; and Public Transit. The Roads and Bridges Division assumes the duties of MassHighway, the Turnpike Authority, the Tobin Bridge, and Department of Conservation and Recreation (DCR) parkways and bridges; while the Public Transit Division assumes the duties of the MBTA and provides the Regional Transit Authorities (RTAs) with central oversight and funding through the new Authority. Transition to the MSTA will phase in over a three-year period.

As I have said in the past, reforms are necessary before the infusion of any additional revenue. If you have any questions about this legislation, please contact my office.

State Sen. Jennifer Flanagan is the representative for the Fourth Worcester District, which includes Westminster, and she is a monthly columnist for The Community Journal.