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House approves pension bill

The state House of Representatives on November 2 joined the Senate in passing a pension bill that will cut benefits for future public employees in Massachusetts in order to reduce state pension costs by $5 billion over 30 years. Differences between the House version and the previously approved Senate version will have to be resolved in a conference committee before a final bill goes to the governor.

In addition, the House approved a new “evergreen” bill that would permit public employee contracts to include a clause specifying that a current contract remains in effect after expiration while a successor agreement is being negotiated. The Senate has not yet acted on that issue. The MTA and other unions lobbied for an evergreen bill to preserve contract stability and allow negotiations to proceed in good faith.

The MTA lobbied for months against reducing pension benefits for future employees, arguing that these employees will already be paying the vast majority of the costs of their own benefits under the current system. New teachers pay more than 90 percent of those costs, contributing 11 percent of their salaries toward their pensions.
 
Thousands of MTA members sent emails to their legislators on this issue, and about 300 met with their legislators in person. The MTA’s argument did not prevail, as legislators cited fiscal pressure from the loss of revenues in this bad economy. The House vote was unanimous, with one representative voting “present.”

The governor and legislative leaders argued that lower benefits are needed to reduce spending on pensions and protect the state’s excellent bond rating, thus reducing the cost of borrowing.

The MTA pointed out, among other things, that good benefits are key to attracting and retaining high-quality educators and therefore to student success.

The MTA was successful in winning several changes that protect current employees, and both branches included a modest increase in the cost-of-living adjustment for current and future retirees, raising the base on which the COLA is calculated from $12,000 to $13,000.

The MTA sought a number of amendments in the House. One was successful. Both the House and Senate bills include provisions that will allow higher education employees who participate in the Optional Retirement Program to switch to the state pension system.

The MTA will be asking the House-Senate conference committee to resolve differences in the ORP language and make other adjustments to the bill that benefit educators.