New enhanced longevity regulations take effect
A regulation that limits the use of "enhanced longevity" benefits in calculating pensions for teachers and other public employees went into effect on April 7. It was adopted by the Public Employee Retirement Administration Commission in March after PERAC incorporated a modification that had been recommended by the Legislature.
The final version of the regulation includes a "grandfather" clause promoted by the MTA that allows those whose contracts included enhanced longevity benefits to count that income for retirement, as long as they begin receiving the benefit before the contract in effect on Jan. 25, 2006, expires.
These employees may continue to receive the benefit in a successor contract or contracts, as long as the amount of benefit that will count toward retirement is capped at the level established in the original contract.
The Massachusetts Teachers Retirement Board had previously mounted legal challenges against some districts’ enhanced longevity benefits, sometimes referred to as "Lexington Plan" benefits. Those challenges affect plans that the MTRB believes differ significantly from the benefits offered in a contract agreement in Lexington. The MTRB had challenged the Lexington plan benefit in the 1990s, but the benefit’s use for purposes of calculating retirement income was upheld by the Massachusetts Appeals Court in 1997.
MTA General Counsel Ann Clarke said that MTA attorneys are continuing to meet with the MTRB to try to resolve these outstanding challenges.