Senate to take up major pension bill
Plan cuts benefits, $5 billion in costs
The Massachusetts Senate plans to vote next week on a major overhaul of the state pension system designed to cut benefits for future workers, saving $5 billion over a 30-year plan.
The plan is similar to one unveiled by Governor Deval Patrick in January that received support from Senate and House leaders. States across the nation are facing problems with unfunded costs that have to be absorbed by taxpayers. Massachusetts, though relatively stable, is facing a $20 billion gap.
State Senator Katherine Clark, a Melrose Democrat who leads the Legislature’s committee on public service, said she expects the bill to be approved by her committee by Monday and reach the floor of the Senate on Thursday.
The House will be debating casino gambling legislation next week and has not set a timetable on the pension bill.
Clark said the Senate bill largely resembles the governor’s, raising the minimum retirement age from 55 to 60 and raising the retirement age for maximum benefits from 65 to 67. The bill would also base pension benefits on workers’ top five years of earnings, rather than their top three years, as is currently the practice.
But the bill differs from Patrick’s plan in some other respects, she said.
The governor’s proposal would drop the annual contribution for all government workers; the Senate plan would keep annual payments the same for most workers, while reducing them dramatically for those who hit 35 years of service.
Clark called the bill the “most major change that’s been done in at least 15 years’’ to the pension system.