Bill S.2026 186th (2009 - 2010)

[Senate, March 30, 2009 – Pursuant to the provisions of Senate Rule 19 , the committee on Ways and Means reports the following bill: 31, 2009 – Text of the Senate Bill An Act providing responsible reforms in the pension systems (Senate, No. 2025) , printed as amended. ]

A N A C T PROVIDING RESPONSIBLE REFORMS IN THE PENSION SYSTEM.

Be it enacted by the Senate and House of Representatives in General Court assembled,

      And by the authority of the same, as follows:

SECTION

Panagiotakos amendment #14

1 . Section 1 of chapter 32 of the General Laws is hereby amended in lines 397-40 3 by striking out , in lines 397 to 40 1, inclusive, as appearing in the 2006 Official Edition, the words :- “ “Regular Compensation”, during any period subsequent to December thirty-first, nineteen hundred and forty-five, shall mean the salary, wages or other compensation in whatever form, lawfully determined for the individual service of the employee by the employing authority, not including, ”

A a nd inserting in the place thereof   the following words :-

“ ”Regular Compensation”, during any period subsequent to July 1, 2009 first, two thousand and nine , shall mean the salary, wages or other compensation in whatever form, lawfully determined for the individual service of the employee by the employing authority, not including, regardless of federal taxability, commissions, indirect payments , in-kind payments or any payments for such items as housing, lodging, travel, annuiti es or other retirement benefits, ”

SECTION 1.  Section 1 of chapter 32 is hereby amended by inserting following the definition of “Regular compensation”, the following:-

              “Regular compensation” for compensation received by any employee hired after June 30, 2009, shall mean exclusively wages received by an employee for services performed in the course of employment for his employer.

“Wages” for purposes of this chapter shall mean the base salary or other base compensation of an employee paid directly to that employee for employment by an employer plus amounts paid as educational incentives, amounts paid for length of service, amounts paid as premiums for shift differentials, and amounts paid as cost-of-living bonuses or cost-of-living pay adjustments, as contained in any applicable collective bargaining agreement or individual contract for employment.

All other forms of compensation not in conformity with the foregoing, including but  not limited to overtime, amounts paid for additional services or for work beyond the normal work year, commissions, bonuses other than cost-of-living bonuses, amounts derived from any salary enhancements or salary augmentation plans of any kind, temporary or ad hoc payments or increases to base salary, indirect, in-kind or any payments for such items as housing, lodging, travel, annuities or other retirement benefits, welfare benefits, workers’ compensation benefits, job-related expense payments, automobile usage, insurance premiums, dependent care assistance, tuition or any other fringe benefits, payments in kind and all payments in any medium other than cash received by an individual from his employing unit for services rendered to such employing unit, shall not, regardless of federal taxability, be considered regular compensation for purposes of this chapter. Wages shall also not include payment in lieu of or for unused vacation or sick leave, or the payment for termination, severance, dismissal, or any amounts paid as premiums for working holidays, except as authorized by law, any amounts paid as early retirement incentives or any other payment made as a result of the employer having knowledge of the member’s retirement.

SECTION 2.   Section 4 of said chapter 32 is hereby amended by striking out , in lines 5 to 7, inclusive, as so appearing, the following words :-

“ ; provided, that he shall be credited with a year of creditable service for each calendar year during which he served as an elected official ; ”

SECTION 3 .  Paragraph Subdivision (1) of said section 4 of said chapter 32 is hereby amended by striking out paragraphs subdivisions (o) and (o ½) , as so appearing, and inserting in place thereof the following subdivision paragraph :-

(o) Notwithstanding any general or special law to the contrary, an individual who serves as an unpaid municipal, county or state employee, or an individual who serves as an unpaid elected or appointed municipal, county or state official, or an individual who serves as a an unpaid special county employee, special municipal employee or special state employee, as defined in section 1 of chapter 268A of the General Laws , shall not be permitted to apply creditable service as a result of serving in said that position in order to increase his allowable retirement allowance under this chapter 32. .

SECTION

Tisei, et al amendment #4

3A. Said subdivision (1) of said section 4 of said chapter 32 is hereby further amended by adding inserting , after subdivision paragraph (o) , the following subdivision paragraph :-

(o ¾) Notwithstanding any general or special law to the contrary, any municipal, county or state employee who receives compensation that is of less than $5,000 annually shall not be permitted to apply creditable be permitted to apply credit able service as a result of service in a position paying less than $5,000 annually which occurs on or after January 1, 2010, in order to increase his allowable retirement allowance under this chapter 32 .

SECTION 4 .   Subsection Subdivision (2) of section 5 of said chapter 32 of the General Laws, as appearing in the 2006 Official Edition, is hereby amended by adding the following paragraph:-

(e) N otwithstanding and general or special law to the contrary, A a ny person who has been a member of two 2 or more systems, and who, on or after January 1, 2010, first, two thousand and ten, has received regular compensation from two 2 or more governmental units concurrently

Panagiotakos amendment #14

, shall, notwithstanding and general or special law to the contrary, upon retirement , receive a superannuation retirement allowance to become effective on the date of retirement that is equal to the sum of the benefits calculated pursuant to this section as though the member were retiring solely from each system , ; provided, however, that the provisions of this paragraph shall not apply to a member who has received part - time creditable service in 1 one or more systems ; and provided , further , that, notwithstanding the provisions of paragraph (c) of subsection subdivision (8) of section 3, each system shall pay the superannuation retirement allowance attributable to membership in that system to the member.

SECTION 5 .   Subsection Section 7 (2)(a)(ii) of said C c hapter 32, as so appearing in the 2006 Official Edition of the Massachusetts General Laws , is hereby amended by inserting after the word s “ whichever is greater ; ” , in line 73, the following words:-

“ ; provided, however, that if on the date of such injury was sustained or such hazard was undergone, the individual was in a temporary or acting position, the amount to be provided under this paragraph subdivision shall be based on the average annual rate of his the individual’s regular compensation during the previous twelve 12 -month period for which he last received regular compensation immediately preceding the date his retirement allowance becomes effective;  provided further, that if the individual was in a temporary or acting position, the board may review the severity of the injury or hazard and the circumstances surrounding the injury or hazard and may authorize a yearly amount of pension equal to seventy-two 72 per cent of the annual rate of his regular compensation on the date such injury was sustained or such hazard was undergone;” 

SECTION 6 .   Paragraph (1) of s S ection 10 of said chapter 32 , as so appearing, is hereby amended in line 4 by striking out , in line 4 , the words “ , or fails of nomination or re- election , ”.

SECTION 7 .   Said paragraph (1) of section 10 of said chapter 32 , as so appearing, is hereby further amended in lines 7 to 9, inclusive, by striking out , in lines 7 to 9, inclusive, the words “or fails of nomination or re- election, or fails to become a candidate for nomination or re-election,”.

SECTION 8 .   Subsection (a) of paragraph (2) of s S aid section 10 of said chapter 32 , as so appearing, is hereby further amended in lines 50 to 51 by striking out , in lines 50 and 51 , the words “ and who fails of nomination or re-election , or ”.

SECTION

Morrissey-Tisei-Tarr amendment #11

8A

Moved and Section # changed from 8B to 8A by BTR because of numerical order of sections being affected.

.   S aid s ection 10 of said c hapter 32 , as so appearing, is hereby further amended by striking out , in line 79, the word “six” and inserting in place thereof the following figure :- 10.

SECTION

Hedlund, et al amendment #10

8B

Moved and section # changed from 11 to 8B by BTR because of numerical order of section being added.

.   Said c hapter 32 is hereby further amended by inserting after section 22D the following new section:-

Section 22E. Notwithstanding any general or special law to the contrary , a pension impact statement shall be filed not later than 30 days after the effective date of any law that affect s the commonwealth's pension liability, as defined in section 1, by chang ing the benefits or contributions of classes of members including , but not limited to , early retirement incentive programs .  The pension impact statement shall be prepared or approved by the actuary of the public employee retirement administration commission and shall analyze, study, and evaluate the costs and the actuarial liabilities attributable to such change. The actuary shall file the pension impact statement with each retirement system to which any portion of the change in liability is attributable and shall send a copy to the secretary of administration and finance and the house and senate committees on ways and means.   The actuary may subsequently revise the estimates in a pension impact certificate and revise the required contribution schedule it requires accordingly.

SECTION

Tisei amendment #6

8 A C

Re-numbered from 8A to 8C by BTR due to order of sections being affected.

. Paragraph (e) of subsection subdivision 2A of section 23 of said chapter 32, as so appearing in the 2006 Official Edition , is hereby amended by adding the following clause: -

“(xv) not award any compensation package that includes  incentive payments for performance in any year in which the total value of the fund is reduced from the total value thereof in the preceding year.

SECTION

Morrissey-Tisei-Tarr amendment #11

8B.  Section 10 of Chapter 32 of the General Laws, as so appearing, is hereby amended in paragraph (b) of subsection (2) by striking out the word “six” in line 79 and inserting in place thereof the following word:- “ten”

SECTION 8C

Moved from being 8C to 11 by BTR because of order of sections (outside section coming after changes to general and session laws).

. Section 8 a shall apply to persons who initially become a member of Group 1, Group 2 or Group 4 as classified pursuant to section 3 of Chapter 32 of the General Laws, on or after the effective date of this act.

SECTION 9 .  Section 111 of chapter 182 of the acts of 2008 is hereby amended by adding the following paragraph:-

The C c ommission shall review Massachusetts contributory retirement systems and make comprehensive recommendations to reform current laws and practices.  Issues the C c ommission shall examine , shall include, but are not be limited to: 1) C c urrent and future employee pension plans and contribution structures; 2) T t ermination allowances pursuant to section 10 of chapter 32 of the General l L aws; 3) G g roup classification systems; 4) C c apping annual pension benefits; 5) P p enalties for pension fraud; 6) E e ligibility for and the level of  benefits for employees who participate under 2 or more retirement systems; 7) Q q ualifications for credit for service pursuant to section 4 of said chapter 32 of the General Laws , including minimum compensation limits for officials to be eligible for credit for service.  The commission shall file prepare a report of its findings and recommendations, including any drafts of legislation necessary to put its recommendations into effect, and file the same with the joint committee on public service no later than September 1, 2009.

SECTION 10 .   Notwithstanding any general or special law to the contrary, the Massachusetts Bay Transportation Authority or any successor authority , shall enter into an agreement to establish retirement or pension benefits or amend existing retirement or pension benefits only if so that an y employee hired after the effective date of the agreement or amendment may shall not receive a retirement or pension benefit prior to the completion of 25 years of credited pension service and before he has attained 55 years of age. The Massachusetts Bay Transportation Authority is not prohibited by this section from permitting may authorize such an employee to retire ment prior to attaining age 55 if , provided however, that either : (i) the employee is entitled to a disability pension under the Massachusetts Bay Transportation Authority retirement system; or (ii) the employee has earned the maximum percentage allowed under the retirement formula of the Massachusetts Bay Transportation Authority retirement system and that the employee waives , until attaining age 55 , the ability his right to collect a pension and retirement benefit otherwise due at the time of retirement until attaining age 55 .

SECTION

Hedlund, et al amendment #10

11.   Chapter 32 of the General Laws, as appearing in the 2006 Official Edition, is hereby amended by inserting after section 22D the following new section:-

Section 22E. (1) Notwithstanding the provisions of any general or special law to the contrary upon the passage of any legislation making changes to any general or special law the th at affects the commonwealth's pension liability, as defined in section 1, that changes the benefits or contributions of classes of members, including but not limited to early retirement incentive programs, a pension impact statement shall be filed not later than 30 days after such adoption. The pension impact statement shall be prepared or approved by the actuary of the public employee retirement administration commission and shall analyze, study, and evaluate the costs and the actuarial liabilities attributable to the change. The actuary shall also file the pension impact statement with each system to which any portion of the change in liability is attributable and shall send a copy thereof to the secretary for administration and finance and the house and senate committees on ways and means.   The actuary may subsequently revise the estimates in a pension impact certificate and revise the required contribution schedule it requires accordingly.

SECTION

Panagiotakos amendment #14

1 1 2

# changed from 12 to 11, see comment below.

. Notwithstanding any special or general law to the contrary, any amount, benefit or payment included in the definition of “regular compensation” , by law or by regulation , as of on June 30, 2009, and included in any applicable collective bargaining agreement or individual contract for employment in effect on June 30, 2009, shall continue to be included in the definition of compensation.

SECTION 1

Moved from being 8C to 12 by BTR because of order of sections (outside section coming after changes to general and session laws).

2. Section 8A shall apply to persons initially classified as members of Group 1, Group 2 or Group 4 pursuant to section 3 of chapter 32 of the General Laws on or after the effective date of this act.

SECTION 1 3 . Section 1 shall be effective on July 1, 2009.

SECTION 1 4 3 .   Except as expressly provided otherwise and notwithstanding the provisions of subdivision (5) of section 25 of chapter 32 of the General Laws, the provisions of this act shall apply to all members of retirement systems who retire after its effective date.

SECTION 14

Changed from 13 to 14 and moved to end by BTR because effective dates generally go at end of bill.

. Section 1 shall take effect on July 1, 2009.