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Budget Conference Underway
Insurance Moratorium Pending
JUNE 6, 2014: Following the passage of the Fiscal Year 2015 budget in both the House and Senate, legislative conferees are now negotiating a final unified state budget that will likely receive final approval in late June or early July.
The Association’s legislative team was successful in passing a two-year extension of the municipal health insurance contribution percentage moratorium in both the House and Senate versions of the budget. Once signed into law, the extension prohibits municipalities from increasing retiree and survivor contribution percentages if they have accepted and implemented the provisions Chapter 69, Acts of 2011.
As we have reported in the past, the moratorium is designed to allow time for the various Massachusetts healthcare reform laws to take effect, as well as for the legislature to address a long-term solution to gaining control over retiree healthcare costs. Observers expect that retiree healthcare will be among the issues considered during the 2015-16 Legislative Session.
Also contained within the budget is a full 3% COLA for state and teacher retirees, applied to a $13,000 base. The COLA takes effect in July for eligible retirees (retired prior to July 1, 2013).
Association officials also strongly support a provision, passed by the House, which adds two seats to the Pension Reserves Investment Management (PRIM) Board. One of the newly created seats would go to the member of a local retirement system.
“As it stands, local retirement systems invest nearly $13 billion in municipal retiree and local taxpayer monies in the Commonwealth’s pension fund, which is controlled by the PRIM Board,” says Association Vice President Ralph White, himself a state retiree and former elected member of PRIM. “By any reasonable measure our local retirees and communities deserve to have a seat at the governing table when it comes to local pension funds being invested by the state. Having a wide range of expertise and opinions on PRIM is important to the future success of the fund.”