Report Brings Focus to Increase For State Retirees & Employees
MAY 2014 Voice: Information recently obtained from the both the National and State Associations of Funeral Directors has brought renewed focus on our Association’s proposal to increase basic life insurance for state retirees and employees to $10,000.
Report Brings Focus to Increase For State Retirees & Employees
MAY 2014 Voice: Information recently obtained from the both the National and State Associations of Funeral Directors has brought renewed focus on our Association’s proposal to increase basic life insurance for state retirees and employees to $10,000.
The basic benefit was last increased in 1985 to the current level of $5,000. Life insurance benefits for local retirees, as well as those teachers receiving their health insurance through the state’s GIC, are set by the city or town from which one retired.
According to the latest industry data, the cost of basic funeral services in the greater Boston area now exceeds $7,500. However, when additional costs such as flowers and cemetery services are factored in, bills can easily exceed $10,000.
Some municipalities, such as the Towns of Braintree and Barnstable, have recently increased basic life insurance benefits to $10,000. It should be noted that only the retirees themselves are eligible for life insurance benefits.
“Basic life insurance is an issue that our Association has advocated for going all the way back to 1968, when we first were founded,” said Association VP Ralph White. “When the current $5,000 benefit was set in 1985, I never would have thought we’d go 28 years without an increase!”
The GIC, which administers both the basic and optional life insurance plans, conducted a study back in 2005, which found that an increase to $10,000 is justified. Back then the estimated cost to be picked up by the Commonwealth was approximately $9 million a year.
Unfortunately, the Governor at the time, one Mitt Romney, did not support the proposal and the report was never advanced beyond the GIC.
However, that is not to say the issue is partisan in nature. Republican State Representative Vinny deMacedo (R-Plymouth) has teamed up with Democrat Senator Marc Pacheco (D-Taunton) as the lead sponsors of the Association’s proposal to increase the benefit to $10,000 (H2288 and S1348).
While both bills remain in study before the Joint Committee on Public Service, an effort is underway to advance the issue through the FY15 Budget process.
Disability Retiree Earnings
In March, the Joint Committee on Public Service favorably released S1250. The bill, sponsored by Senator Thomas McGee (D-Lynn) increases the amount of outside income a disability retiree is allowed to earn. A companion bill was also filed in the House by Rep. Tackey Chan (D-Quincy).
Accidental disability retirees are currently allowed to return to part-time employment, but are restricted in the amount they are allowed to earn. The current formula allows earnings $5,000 above the difference between a retiree’s pension and the salary now paid for the position from which they retired. The additional $5,000 was put in place back in 1982, some 32 years ago.
Last year, the Special Commission on Disability Retirement, on which former Association President Ralph White served, recommended a $10,000 increase in allowable earnings. The increase would bring the earnings into line with inflation.
“This is the type of issue that is a win-win for retirees and the Commonwealth. It costs nothing to the taxpayers. In fact it is a net gain because when a retiree is working they’re also paying state taxes and helping to care for their family,” explains Legislative Liaison Shawn Duhamel. “Just because someone gets hurt or sick it does not mean that they should not be allowed to do some work. Not only do disability retirees have obligations to their family, but it is also good for people to remain engaged in the workforce if they are able to do so.”
Proposals Pending
With the end of July just over three months away, Beacon Hill is flush with a flurry of activity on several major bills. Among those receiving the most public attention is legislation to increase the state’s minimum wage, as well as make changes to unemployment insurance benefits.
While the many Association sponsored bills remain within the Joint Committee on Public Service, a few issues have advanced forward.
Pending before the House Committee on Ways and Means is a bill, sponsored by Rep. Tom Golden (D-Lowell) that would adjust pensions for those retired prior to July 1, 2004 with an Option B or C pension. Golden’s bill (H2354) increases retiree pensions by a flat dollar amount or percentage. Under Prop. 2 ½ the bill must be a local option, but would be automatic for state and teacher retirees.
H59, the Retiree Healthcare reform bill, remains under active consideration before the Public Service Committee. Legislation regarding the reimbursement of Medicare Part B premiums (S1220), GIC Appeals (H2285) and Survivors Insurance (H1261) are being considered along side H59.
Veterans legislation (H2289 & S1282), along with all bills relative to disability retirement (H2234, H2286 and H2258), remain under study within public service.
Finally, legislation aimed at incrementally increasing the state and teachers COLA base beyond the current $13,000 is before the Joint Public Service Committee. This issue remains under close review, along with the 2014 investment performance that would be needed for future COLA base increases.