JULY 2, 1999 – Public Service Creates Stir With Unexpected Bill– On
Tuesday, June 22, the Joint Committee on Public Service created quite a
stir with public employees and their State House lobbyists when the
Committee unexpectedly released an omnibus early retirement bill
covering nearly all public employees.
their final executive session before the summer recess, the Committee
was expected to take action on the so-called rule-of-90 teachers
retirement bill along with the 75-25 public safety retirement bill.
After taking action on over 100 bills covering a myriad of retirement
issues, the Committee released H-712 covering municipal police and
county correction officers under 75-25.
H-712, currently employed municipal police and county correction
officers (who are not members of the State Retirement System) will have
the option of joining the 75-25 plan. Those who choose to join or any
new employees hired after the effective date of the act will contribute
12% towards their pension. Their pensions will then be capped at 75%
after 25 years of service. Those opting to join must contribute for a
minimum of three years.
Committee, which is chaired by Senator Brian Joyce (D-Milton) and Rep.
Paul Casey (D-Winchester), then attached nearly a dozen bills to H-3372
and discharged it favorably. Among the bills attached to H-3372 was the
teachers’ rule-of-90 and another version of 75-25 to be applied to
firefighters and virtually all other public safety employees under
What was not immediately
known is that the Committee created separate early retirement plans for
group 1 and group 2 employees and a third plan offering a five year
early retirement incentive to state employees who have at least
25 years creditable service and contribute 5%. The ERI is crafted much
the same as were the incentives given in the early ‘90s with the
employee being given five extra years to apply towards their age or
years of service.
“Although we have
been pushing for an early retirement bill for Group 1 employees, this
bill has come as a complete surprise. As much as I would like to see
something pass, it is unlikely the bill will move beyond Ways and Means
before a cost analysis can be completed,” said Association President
Ralph White. “At this point no one has a handle on what the overall
cost of each of the plans will be.”
following is a brief summary of the major components of the omnibus
retirement bill H-3372, which has now been redrafted as H-4477:
1. Public Safety Retirement (75-25):
New public safety employees, including fire and state correction
(excludes municipal police) must pay 12% contribution and are entitled
to 60% pension after 20 years. Additional 3% for each year over 20,
maximum being 75% after 25 years of service. Current employees can
elect to participate in program but must pay minimum of 3 years at 12%.
These provisions are automatic for state employees, but are subject to
2. Group 1&2 Formula Change w/25 years:
Group 1 employees, with 25 years, can use 2.0 factor in benefit
formula, regardless of age. This equates to minimum 50% pension. Group
2 employees, with 25 years, can use 2.5 factor in benefit formula,
regardless of age. This equates to a minimum 62.5% pension. These
provisions are not close-ended and would be permanent provisions in
Chapter 32. They are automatic for state / teachers, but are subject to
3. Group 1 (“5 percenters”) Early Retirement Incentive (ERI):
State employees who are members of Group 1, who are working when H-3772
becomes law (or 1/1/00), contributing at 5%, are eligible to retire at
the intended date of retirement, have at least 25 years of service, can
be eligible for ERI. Those eligible can obtain additional 5 years for
either age, creditable service or combination of both. Applications
will be submitted between 5/1/00 to 6/15/00 with a 7/1/00 date of
retirement. This section only applies to members of the state retirement system.