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Closing up the loopholes

E-mail|Link|Comments () June 10, 2009 06:50 PM

By Sean P. Murphy, Globe Staff

The package of changes in the state pension law agreed to by the House and the Senate today would close numerous loopholes in the pension law, many of which were detailed recently in stories published in the Boston Globe.

"One-day rule"
The Legislature would wipe out the rule that now allows elected officials, including legislators, to claim a full year of credit toward pensions for as little as half a day of service during any calendar year.

The Globe in a March 29 story showed that George Colella of Revere used the “one-day” rule three times in his career on the school committee, city council and as the mayor. The rule comes into play when elected officials remain in office until their successors are sworn in during the first days of January. The Globe story estimated that the rule delivered an extra $85,000 in lifetime pension benefits to Colella.

In a May 3 story, the Globe also showed that 52 retiring legislators used the one-day rule since 1991, adding an estimated $850,000 in extra lifetime pension benefits to the lawmakers, or about $16,000 each. The rule is available only to elected officials. Other employees receive credit calculated to the actual day they leave service.

“Termination allowance”
The Legislature would eliminate the provision allowing elected officials with at least 20 years of service to claim early, enhanced pensions when retiring.

The Globe in a May 3 story showed how at least 10 former legislators pocketed as much as $550,000 in additional lifetime pension benefits under a loose interpretation of that law, which on its face appeared to apply only to lawmakers defeated in elections. The 10 legislators nevertheless received the benefit when retiring, instead of losing their seats.

In a May 11 story, the Globe showed that at least 93 of the Legislature’s 200 members were on track to be eligible for the early, enhanced pensions worth hundreds of thousands of dollars.

Pension credit for volunteer service
The Legislature would eliminate pension credit for service in positions paying less than $5,000 a year.

The Globe, in a Feb. 11 story, showed how an amendment slipped through the Legislature in 1998 benefited former state senator and Beacon Hill lobbyist John Brennan, who had served almost 20 years as a volunteer Malden library trustee. The amendment allowed Brennan to count his library service toward his pension, increasing it by $22,000 a year. Brennan, who declined to say if he lobbied for the amendment, later renounced that portion of his pension based on library service.

The Globe also reported in an April 19 story that Linda Bassett, the wife of a former state legislator, claimed more than two years of credit toward a pension for serving on the Lynn library board of trustees, when she missed every meeting.

In a March 10 story, the Globe detailed how two former town moderators – one from Milton, the other from Canton – increased their pensions substantially after lobbying a state representative to give unpaid moderators pension credit.

Consultant’s pay for retirees
The Legislature would block retired public employees from claiming to work as “consultants” in government positions to evade the usual restrictions on earned income while retired.

The Globe, in an April 27 story, showed how lawyer Paul L. McCann retired from the Boston Redevelopment Authority in 2005 with an annual pension of $97,000, but received $162,000 as a BRA consultant last year.

Limits on “regular compensation”
The Legislature would more narrowly define a retiree’s compensation when determining the size of a retiree’s pension to exclude allowances for housing, lodging, travel or automobile use. William Bulger, the former senate president and former University of Massachusetts president won a legal battle for this perk, increasing his pension by $17,000 to about $197,000 a year.