Subdivision (3) of Section 8 of Chapter 32 of the General Laws, as appearing in the 2020 Official Edition, is hereby amended by striking in line 130 subdivision (3) and inserting in its place:

(3) Modifications of retirement allowances.If as a result of such medical report by a regional medical panel, as a result of the submission of earnings information under section ninety-one A, or as the result of the completion of a rehabilitation program as provided for under subdivision (1), or under subdivision (5) of section twenty-one, the commission finds that such retired member is engaged in gainful occupation and has excess earnings, for three or more consecutive years, which result in the repayment of his or her entire retirement allowance pursuant to section 91A, said member’s retirement allowance shall be modified prospectively.

When a determination is made that a retirement allowance shall be modified, the retiree and the appropriate Retirement Board will be notified, and the retiree will be given the opportunity to be heard by the Commission or its designee. When the determination is final, the retiree and the appropriate Retirement Board will be advised. The retiree may appeal the Commission’s determination to the Contributory Retirement Appeal Board pursuant to section 16. Such modification shall remain in effect, for at least one year, unless such medical report finds that the mental or physical condition of such member has deteriorated.  If the annual rate of his earnings should later be changed, the yearly amount of his pension shall be further modified by reinstating, increasing, reducing, or suspending it, as the case may be.

The applicable Retirement Board may pay over to a health insurance carrier that portion of the allowance to maintain the disability retiree’s health insurance coverage. A retiree whose allowance is modified pursuant to this process will continue to be considered as a disability retiree for purposes of chapter 32A, chapter 32B, chapter 34B, and section 100B of chapter 41.

The public employee retirement administration commission shall, subject to the provisions of section fifty of chapter seven, promulgate regulations establishing, and providing a system for annually adjusting for inflation and such other equitable factors as the commission deems relevant, the fair amount of outside income that may be earned by a member retired pursuant to section six or seven, and shall promulgate regulations for the determination of the potential earnings of any such retired member based upon such member's functional capacity, age, education, and experience.