Exempts Current Retirees And Includes Strong Retiree Protections
JANUARY 11, 2013: Governor Deval Patrick has endorsed a report by the Special Commission on Retiree Healthcare that makes significant changes to public retiree healthcare benefits for future retirees, but not for current retirees.
Exempts Current Retirees And Includes Strong Retiree Protections
JANUARY 11, 2013: Governor Deval Patrick has endorsed a report by the Special Commission on Retiree Healthcare that makes significant changes to public retiree healthcare benefits for future retirees, but not for current retirees.
Most important to Association members are a series of protections for retirees and survivors included in the report and now endorsed by the governor. The protections, which include mandatory survivor premium contributions and a prohibition on raising municipal contribution rates on existing retirees, were won by our Association with the help of the AFL-CIO.
(Please refer to our December 20, 2013 Breaking News for a detailed summary of the Commission’s recommendations)
Our Association’s Shawn Duhamel joined Andrew Powell as the retiree and labor representatives on the Commission, respectively. Anne Wass of the Mass. Teachers Association served as the Commission’s cochair.
Today’s announcement by Governor Patrick has been widely covered by the Boston press corps. Grabbing the media’s attention is the fact that the recommendations, contained in the report, may save Massachusetts taxpayers some $20 billion over the coming thirty years. The savings is achieved by increasing the minimum years of service required to qualify for retiree healthcare benefits from the current 10 years of service to 20 years. Future retirees must also be at least age 60 to qualify for retiree healthcare.
Future retirees will also face a proration of insurance contribution rates depending upon their total years of creditable service. Retirees, with 30 or more years, will be exempt from proration and will receive the full employer contribution. However, retirees, with less than 30 years service, will see their benefits prorated, with the maximum contribution being 50/50 at 20 years service.
Our Association and labor agreed to these significant changes, but only after a series of “must have” protections for current retirees, survivors and those active employees close to retirement age were secured. First and foremost, all current retirees and survivors are completely exempt from the changes to eligibility and prorating. Active employees, with 20 or more years of service and age 50 or above, are also exempt. Finally, active employees, age 60 or above with at least 9 years creditable service, are also fully exempt.
“We had to make sure that current retirees and active employees, who are close to retirement age or are career public servants, are held harmless. The public employee unions were with us every step of the way. Andrew Powell and I presented a unified front,” said Duhamel. “Retirees and labor saw this as an opportunity to be part of the solution to ever increasing retiree healthcare costs. Something had to be done to lower costs and secure affordable quality benefits for all retirees and survivors in the future. I feel this report does both.”
The governor has indicated that he will file legislation later this month that mirrors the recommendations within the report. That bill will then go to the House, where the legislative process will begin in earnest. Final passage of a bill is expected to take place by July.
Click here for a full copy of the Commission’s report, as submitted to the Governor and Legislature.