Resolution on Pension System Reform

As adopted by the members, January 13, 2001

Whereas, the Massachusetts Contributory Retirement System was established in 1945; and

Whereas, the Massachusetts Contributory Retirement System was designed to provide an adequate benefit for career public employees to retire at age 65 or age 55 for public safety employees; and

Whereas, the Massachusetts Contributory Retirement System provides an inadequate benefit for non-career employees; and

Whereas, the Massachusetts Contributory Retirement System has made it more difficult for cities and towns to attract and retain qualified employees; and

Whereas, the Massachusetts Contributory Retirement System acts as a strong disincentive for attracting experienced municipal managers and department heads who do not expect to receive a retirement benefit from the Massachusetts Contributory Retirement System; and

Whereas, the new Early Retirement benefit for teachers will make it very difficult to replace the 8,000 teachers who are expected to retire in 2001 and is very unfair to the rest of Group 1 employees; and

Whereas, the current contribution rates of the Massachusetts Contributory Retirement System are grossly unfair to new employees; and

Whereas, the system of group classification of employees has been amended so often that it is no longer coherent; and

Whereas, the vesting period of 10 years of the Massachusetts Contributory Retirement System is twice to three times as long as the industry standard of three to five years; and

Whereas, the Cost-of-Living-Adjustment plan of the Massachusetts Contributory Retirement System does not adequately protect retirees’ pension allowance from inflation; and

Whereas, the Massachusetts Retirement System also provides an inadequate benefit for employees who suffer a non-job-related disability; and

Whereas, the Massachusetts Contributory Retirement System has been amended in piecemeal fashion over the past 55 years and is in desperate need of a comprehensive reform.

Therefore it is hereby resolved:
• That the governor initiate an independent review of the retirement system on the issues described in this resolution; and

• That such independent review detail the costs associated with any proposed benefit change and indicate how such changes would be paid for; and

• That such independent review take into consideration what private sector employers in Massachusetts provide for in retirement benefits and how those benefits are paid for; and

• That such independent review compare the Massachusetts retirement system with the retirement systems in other states; and

• That the governor and the Legislature take no action on any proposed benefit change or other change to the pension system until the independent review is completed.