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Pension boost aids lawmakers

Loophole may cost taxpayers an extra $3m

By Sean P. Murphy
Globe Staff / May 3, 2009
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Ten former state lawmakers are enjoying early, enhanced pensions after quitting the Legislature, beneficiaries of a loose, even questionable, reading of state law that could cost state taxpayers up to $3 million in additional retirement costs, according to a Globe review.

The State Retirement Board granted the special benefits under a 1950 law that says public officials can take immediate pensions if they lose an election or fail to qualify for the ballot. But of the 14 state legislators who have received such pensions, only four fit that definition. The other 10 were not defeated by voters. They departed office voluntarily.

Treasurer Timothy P. Cahill, whose office oversees the Retirement Board, suggested such a stretching of the rules is improper.

"The intent of the statute is to provide a benefit to someone who was involuntarily removed from their position, through no fault of their own," Cahill said in the e-mailed statement. Cahill, a Democrat, declined a request for an interview, leaving questions unanswered over whether he plans to strip any of the benefits awarded to the 10 legislators.

The Globe discovered the pension enhancements during a review of retirement benefits of former lawmakers, part of an ongoing series by the newspaper. The review found that many legislators routinely take advantage of provisions that allow them to boost their retirement pay in ways that most Massa chusetts residents cannot. In the most common practice, the review found, more than 52 legislators were awarded a full year of pension credit for as little as one day of work in a calendar year.

The use of such provisions by the same lawmakers who shape retirement rules illustrates how deeply pension gamesmanship, as it is viewed by critics, is embedded in the culture of Beacon Hill. Governor Deval Patrick, a Democrat, complained last week that his proposals to overhaul pension laws are idling in the Legislature.

Cahill, in his e-mailed statement, said he was not responsible for pensions that were approved before he was elected. "I can't speak for past retirement boards or the actions of retirees but I can say that we will not shy away from making difficult decisions," the statement said.

After the Globe inquiries, the Retirement Board on Thursday changed course. For the first time, the board voted to deny such a pension to a recently retired state representative, Democrat Paul C. Casey of Winchester. Casey, 48, had sought to boost his pension by $10,000 a year, or up to $315,000 extra if he lives to 80, a conservative estimate based on Social Security actuarial tables. Casey did not respond to requests for comment.

The concept of early, enhanced pensions was approved by lawmakers in 1945 to protect state employees with 20 years or more of tenure in the event they were fired to make way for patronage appointments during changeovers in administrations. It gave them one-third of their salary as a pension, starting as soon as they were dismissed. In 1950, the Legislature expanded it to include its own members as well as other elected officials.

The real value to the retiring lawmakers is not merely that the pensions are boosted in size, but that the beneficiaries begin collecting them immediately, with no financial penalty. It has allowed most of these lawmakers to collect pensions in their 40s that would not otherwise kick in until they were in their mid-50s.

Christopher J. Hodgkins, a Democrat from Lee who stepped down from the House in 2003 at the age of 45, for example, got a $15,800-a-year boost. That is worth about $550,000 in total extra benefits if he lives to 80.

Francis G. Mara, a Democrat from Brockton who retired in 1996 at age 45, got a $11,300-a-year increase, worth a total of $395,000 if he lives to 80; and Paul E. Caron, a Democrat from Springfield who retired in 2003 at age 47, got a $14,500 annual bump in his pension, worth $480,000 in estimated lifetime payments.

Mara and Caron are now lobbyists.

"I was told there was a provision for this, that it was the law, and I just put my papers in and that was it," said Mara.

Joseph D. Malone was state treasurer in 1991, when immediate pensions for voluntarily departing legislators were first approved by the Retirement Board. Malone in an interview said he could not remember much discussion or analysis prior to the approvals.

"I can't remember any department head coming to me and asking, 'What should we do,' and me saying 'Yeah, give it to them,' " said Malone, a Republican.

"It was a long time ago," he said.

Among the first batch of three state representatives who got the special pension in 1991 was Alfred E. Saggese Jr. of Winthrop. Saggese said in a telephone interview that he knew nothing about the distinction between losing reelection and not seeking reelection.

"You are telling me this for the first time," he said. "I went to the Retirement Board, filed my papers and answered their questions. My understanding was that as a legislator you were immediately eligible to take a pension. I took the pension they gave me."

Saggese retired at age 44, receiving about $11,000 a year in additional pension payment, almost $400,000 in estimated additional lifetime pension payments. He has practiced law since then.

The other two representatives departing in 1991 were Vincent J. Piro of Somerville, and Angelo Marotta of Medford. Piro and Marotta did not return telephone messages.

J. James Marzilli Jr., the former Democratic state senator from Arlington, has an application for a termination pension pending at the Retirement Board. Marzilli announced he would not seek reelection two days after his arrest in June for allegedly sexually harassing four women in Lowell. He is awaiting trial.

Even though he did not campaign, Marzilli's name remained on the ballot in November's election. That may technically allow him to claim he lost his seat - and double his pension to about $27,000 a year, beginning when he turns 51. Marzilli's lawyer did not return a telephone message.

Less lucrative for each legislator, but far more prevalent, is the practice of awarding a full year of credit toward a legislator's pension for as little as one day in office in a calendar year. The provision produces a natural departing bonus for lawmakers, because their terms don't end until their replacements are sworn in in January.

Since 1991, that interpretation - which applies only to elected officials - has added almost $850,000 to the expected lifetime pension costs of 52 former legislators, or an average of about $16,350 each.

Almost all former legislators took advantage of the provision, both Democrat and Republican, but a few declined the extra boost, including Thomas M. Finneran, the former Democratic House speaker. By doing so, Finneran left about $31,000 on the table.

The law that opens the door for the so-called one-day pension boost is ambiguous. It says elected officials "shall be credited with a year of creditable service for each calendar year during which he served." An opinion issued by former attorney general Francis X. Bellotti in 1976 said one day of service in a year was sufficient to qualify.

Bellotti, in a telephone interview, last week said his opinion was "a straight statutory interpretation of what the language meant," without regard to politics.

"It didn't come out of thin air," he said.

Sean Murphy can be reached at smurphy@globe.com.