General Court Completes Formal Sessions with New Retiree Legislation Being Enacted
2024 is the second year of the 2023-2024 biennial session for the Massachusetts General Court, the House and Senate as we commonly refer to them. As part of the process, the House and Senate completed formal sessions on July 31st/ August 1st. As required by the rules, they will continue to meet informally through the end of the year, until the next session starts in January.
While no formal roll call votes will occur during the remainder of the session, legislation will continue to advance. As a recap, along with the passage of the special COLA Commission and the increase in the state basic life insurance (see page 1), the FY25 Budget also included the annual 3% COLA for State and Teacher Retirees on a $13,000 base, full funding of the Commonwealth’s appropriation to the State and Teacher’s Retirement Systems ($4.5 billion) and full funding of the Group Insurance Commission ($2.1 billion). Eight other pieces of legislation from the Association’s 2023/2024 legislative package were reported favorably from the Joint Committee on Public Service and advanced to House or Senate Ways and Means, Healthcare Financing and Senate Rules for further consideration and research on the financial impact. As we head into the fall, we will continue to advocate for these bills and engage with the Chairs of the committees.
Looking ahead, we are starting to prepare our legislative package for the upcoming bill filing period which will occur at the start of the new legislative session in January. We will be reviewing the current package as well as submitting additional bills that will seek to provide transparency and protection for retirees and survivors.
NEW RETIREMENT LAWS OF IMPORTANCE
Beyond our own legislation this session, four additional public retirement related measures of importance have also recently become law. Three of them are highlighted here while the fourth, creating a Task Force on Post Retirement Service, is discussed on page 2.
Contained within the omnibus veterans’ bill, that was signed into law as the Hero Act, is a reform of the so-called Veterans Buy-Back.
Originally created in 1996, with the support of Mass Retirees, the Veterans Buy-Back allows public employees to purchase up to four years of their military service time as credible service for pension purposes. The cost of the buy-back is 10% of the employee’s starting salary. Eligibility, in terms of veteran status, is determined with the state’s retirement law – not the federal standard defining “veteran” status.
The mechanics and timeframe of the buy-back process, despite having been amended more than once since the law’s creation some 28 years ago, have been the subject of confusion and criticism regarding the notification process and the timeframe in which a public employee is granted to initiate the buy-back.
To be clear, only active public employees are eligible to purchase or buy back creditable service. Retirees and deferred retirees or inactive public employees are not eligible. In fact, federal law specifically prohibits buy-backs of any type for anyone who is not an active member in service. The rationale is that the prohibition protects against the gaming of the retirement system.
For the past several years, our Association, with public pension officials led by the Public Employee Retirement Administration Commission (PERAC) and public safety union leaders, have advocated for the Veterans’ Buy-Back law to be reformed. These efforts have succeeded with needed reform within the Hero Act.
The reform grants amnesty to any active employee who is a veteran and had not yet purchased their years of military service. This fall, the Commonwealth’s 104 public retirement systems will be required to notify all active employees of their right to purchase up to four years of military service – if they are eligible.
An employee, who is a veteran, has a limited amount of time to purchase the credit. Also, employees can use their purchased military time to vest (vesting comes at 10-years of creditable service). New employees must purchase their military service prior to or within 1 year of vesting.
TWO NEW DISABILITY REFORM LAWS
Two new reform laws, one which was a stand-alone bill and the other which was contained within the outside sections of the budget, pertain to disability retirement. The first reform enables certain first responders who suffered a violent crime while performing the duties of their position and were left unable to continue in that position to seek a disability pension at 100% of their regular compensation. The legislation currently defines a “violent act injury” as a catastrophic, life-threatening or life-altering and permanent bodily injury sustained as a direct and proximate result of a violent attack upon a person by means of a dangerous weapon, which is designed for the purpose of causing serious injury or death, including, but not limited to, a firearm, knife, automobile or explosive device. As with any legislation of this nature, the bill applies prospectively, and current retirees are not eligible.
The second law pertains to accidental (work related) and ordinary (non-work related) disability retirees returning to service. Until now, a disability retiree could petition to return to work or be found fit to return to work but were restricted to returning to their previous or similar job in the same department from which they retired. We should note that since the return-to-work law was reformed in 1998 – over 25 years ago, few retirees have been found fit to return and even fewer were able to regain employment.
With the new law, a disability retiree who wishes to return to public service has been granted the “expanded right” to petition PERAC for examination to return to public sector employment in a position or department other than from which they retired. It must be emphasized that this expanded right can only be initiated by the retiree themselves, and not by PERAC or other officials. Also, with this right there is no guarantee, even if found fit, that the disability retiree will be hired in the new position.
“That said, we do envision that this new process will be attractive to some members who were forced to retire due to a disability and have the skills required to pursue another public career’” comments Legislative Liaison Nancy McGovern. “In fact, we do periodically hear from members who would very much like to return to full-time public sector work in a different field or community. Until now, they were not allowed to do so.”
Where these laws are brand new and do not take effect until later this fall, regulatory details remain to be ironed out by PERAC. Updates will be provided here, on our weekly online or hotline messages and website.