Jan. 18, 2011
BOSTON — Gov. Deval Patrick filed legislation Tuesday to reform the state’s public employee pension system, saying the reforms will save the state billions of dollars.
The bill would raise the retirement age for most government employees from 55 to 60. It would eliminate early retirement incentives and it would use an average of the workers's highest-paid five years of employment to calculate pensions. That's longer than the three-year average that's used now -- and would lead to smaller pensions for many workers.
State their pensions are far from generous as it is. On average, retired state employees collect $26,000 per year, and they’re not eligible for social security.
But Patrick says everyone needs to make sacrifices for the sake of the system.
" We’re asking state employees to help assure that this program is sustainable and without this program it’s not," the governor said.
With the state facing a budget gap somewhere between $1.5 billion and $2 billion, as well as more than $20 billion in unfunded pension liabilities, House Speaker Robert Deleo says the system's problems must be addressed.
"The time for action is now. The time for action is greater now that it has ever been," DeLeo said.
The bill also aims to end so-called double-dipping. That provision comes after late Middlesex County Sheriff James DiPaola allegedly tried to take advantage of a loophole in the system that would have allowed him to collect an annual pension of nearly $100,000 in addition to his sheriff’s pay of $123,000. DiPaola committed suicide in November shortly after his plan came to light.
Patrick estimates that the reforms will save the state more than $5 billion over the next 30 years.