Legislators urged to support MTA pension amendments
The MTA is seeking amendments to the pension bill released on October 31 by the House Ways and Means Committee (H. 3787). Like the Senate pension bill passed in September, H. 3787 would reduce pension benefits for future public employees. This bill is likely to move through the House quickly – possibly as soon as November 2. Members need to contact their representatives TODAY by going to http://massteacher.org/actnow.
The MTA opposed reductions in future employees’ benefits when the bill was proposed by the governor and taken up in the Senate. Although we were not able to defeat the bill, we did eliminate some changes that would have affected current members, and we also won two amendments in the Senate that are not included in the House bill. We are now seeking to have those provisions included in the House version through amendments.
The first is a no-cost amendment that allows higher education faculty to leave the Optional Retirement Program, a defined-contribution plan similar to a 401(k), and return to the state pension system. The second is a no-cost amendment allowing part-time local presidents to receive pension credit for the time they spend working as association presidents, just as full-time local presidents do.
Here’s a recap of what is in both the Senate and House versions of the bill:
- Both bills are designed to save the Commonwealth $5 billion over 30 years by reducing pension benefits for future employees.
- The pension formula would be changed so that future public employees would have to work longer to receive their pensions.
- Pension benefits would be based on the highest five-year salary average, not the current three-year average.
- The base on which the annual cost-of-living adjustment for both current and future employees and retirees is calculated would increase from $12,000 to $13,000, for an increase of $30 a year. That is less than the MTA has been seeking, but is nonetheless an improvement.
One significant difference is that the House establishes 57 as the earliest age a future public employee could begin collecting pension benefits. That is two years later than under current law and three years earlier than in the Senate bill. The MTA is evaluating the impact of this change.