SENATE DOCKET, NO. 1932        FILED ON: 4/7/2011

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1912

The Commonwealth of Massachusetts

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PRESENTED BY:

Marc R. Pacheco

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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act relative to the enrollment into the state retirement system of higher education employees in the optional retirement plan.

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PETITION OF:

SENATE DOCKET, NO. 1932        FILED ON: 4/7/2011

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1912

The Commonwealth of Massachusetts

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In the Year Two Thousand Eleven

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An Act relative to the enrollment into the state retirement system of higher education employees in the optional retirement plan.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

      SECTION 1. Subdivision (1) of Section 4 of Chapter 32 of the General Laws is hereby amended by inserting at the end thereof the following new paragraph:-

      (t) Notwithstanding any general or special law to the contrary, any active member of the optional retirement system established pursuant to subsection (3) of section 40 of Chapter 15A of the General Laws, or optional retirement plan enrollee on an approved leave of absence, shall have one opportunity to transfer to the state employees retirement system, governed by Chapter 32 of the General Laws, with creditable service allowed for any such time they were active participants of the optional retirement program. Any such employee choosing to transfer will also be allowed creditable service for any years of participation, or portions thereof, in the state employee retirement system immediately prior to their enrollment in the optional retirement program.

      (i)    Eligibility for creditable service for time spent in the optional retirement program and service relinquished in the state retirement system by enrollment in the optional retirement program shall be conditioned upon the payment, in one lump sum or in installments upon such terms as the state retirement board may provide, of an amount equal to the contributions such employee would have otherwise paid into the state employees retirement system had they been a member, plus actuarial-assumed interest for the years spent as an actively contributing member in the optional retirement plan, plus all employer contributions to the employee’s optional retirement plan account. Any employee in the optional retirement program who elects to participate in the state retirement system must transfer all assets, or pay an amount equal to all such assets, accrued under the Massachusetts optional retirement plan to the state retirement system, providing that such assets shall be credited toward the purchase of creditable service.

      (ii)    Within thirty (30) days of enactment of this legislation, the Department of Higher Education shall notify active members of the optional retirement program, or those members on an excused leave of absence of two years or less, of their eligibility for this one-time transfer opportunity to the state employee retirement system. Eligible employees who choose to transfer to the state retirement system must make application for such transfer to the state retirement board within one hundred eighty days (180) days of notification by the state of their eligibility for this transfer. Any elections under this section shall apply to current and future active members of the optional retirement plan and those on an approved leave of absence of two years or less on the effective date of this act, and shall be for one time, only, provided, however, that any such current or future faculty member who is not tenured on the effective date of this act, shall be permitted to postpone election to participate in the state employee retirement system until acquisition of tenure, with timelines set out in this section to commence from the date of such member's tenure acquisition. No further changes in participation, either into the state retirement plan or out of the optional retirement plan, will be permitted.

      (iii) Within 30 days of application for transfer to the state retirement system, such employees, subject to the rules and regulations of the state board of retirement, shall be notified by the state retirement board of their eligibility for transfer and the cost of such transfer. If eligible, such members shall have one hundred (180) days from notification to (1) transfer all assets, or an amount equal to all such assets, held in the optional retirement program and (2) pay in one lump sum or enter into an installment agreement with the state retirement board to pay any amount owed for purchase of creditable service not covered by the transfer of assets. Any money remaining in an optional retirement plan account following the transfer of an employee to the state retirement system and the complete payment for such transfer, as set forth above, will belong to the transferred employee and no longer be a part of the Massachusetts optional retirement system, providing that remaining funds will still operate as pre-tax retirement account established between the employee and the former plan provider and subject to the rules and regulations thereof.

      (iv) Employees who elect to transfer to the state retirement system will no longer be members active or otherwise in the Massachusetts optional retirement system, but shall henceforth be required to make contributions to the state employee retirement system at the same rate the member contributed to the optional retirement plan.The Massachusetts Department of Higher Education and the State Board of Retirement shall take such actions that are required or appropriate to ensure that the optional retirement program and the state  employees’ retirement system, as hereby amended, continue to be tax-qualified plans in accordance with the Internal Revenue Code of 1986, as amended.