Bill H.3857

HOUSE DOCKET, NO. 2660 FILED ON: 1/19/2023

HOUSE . . . . . . . . . . . . . . . No. 3857

By Representative Gentile of Sudbury, a petition (accompanied by bill, House, No. 3857) of Carmine Lawrence Gentile for legislation to provide retirement incentives in public higher education. Public Service.

The Commonwealth of Massachusetts

_______________

In the One Hundred and Ninety-Third General Court
(2023-2024)

_______________

An Act to provide retirement incentives in public higher education.

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. For the purposes of this act, the following word shall, unless the context clearly requires otherwise, have the following meaning:

“State employees retirement board” or “board”, the board established in section 18 of chapter 10 of the General Laws for the purposes of administering the state employees’ retirement system.

“State university”, an institution listed in section 5 of chapter 15A of the General Laws.

“State universities retirement incentive program” or “program”, the program established in section 3.

SECTION 2. (a) Notwithstanding any general or special law to the contrary, the state universities shall achieve direct payroll savings in fiscal year 2025 and beyond through implementation of this act.

(b) To achieve the savings required by subsection (a), a state university may: (i) offer 1-time incentive payments to encourage employees to resign or retire; or (ii) implement the retirement incentive program as described in sections 3 to 7, inclusive.

(b) The state universities shall, not later than March 20, 2024, provide notice to the state board of retirement on the number of employees anticipated to separate from state service, and anticipated timing, under clauses (i) and (ii) of subsection (b).

SECTION 3. (a) Notwithstanding chapter 32 of the General Laws or any other general or special law to the contrary, the state board of retirement shall establish and implement a retirement incentive for employees of state universities, to be known as the state universities retirement incentive program.

(b) To be considered eligible by the state board of retirement for any of the benefit options under the program, an employee shall: (i) be an employee, as of the effective date of this act and through the date of retirement established in section 4, of a state university, the board of trustees of which has approved participation in this program by January 1, 2024; (ii) be a member in service of the state employees’ retirement system pursuant to clause (i) of paragraph (a) of subdivision (1) of section 3 of chapter 32 of the General Laws as of the effective date of this act and have 25 years or more of creditable state service at the time of their program application; (iii) be classified in Group 1 of the state employees’ retirement system pursuant to paragraph (g) of subdivision (2) of said section 3 of said chapter 32 as of the effective date of this act; (iv) be eligible to receive a superannuation retirement allowance in the absence of the program pursuant to subdivision (1) of section 5 of said chapter 32 or subdivision (1) of section 10 of said chapter 32 as of the effective date of this act; (v) have not notified, in writing, as of January 1, 2024, either the state university or the state board of retirement of their planned retirement or separation from the university within the next year; and (vi) file a timely application with the board pursuant to section 4.

(c) Notwithstanding subsections (a) and (b), the following employees shall not be eligible to receive any benefit from the program: (i) employees whose compensation is funded from a capital appropriation or federal grant, as each is defined in section 1 of chapter 29 of the General Laws, as of the filing date for the application pursuant to section 4; (ii) elected officials; and (iii) employees or members of the state employees’ retirement system who, as of the effective date of this act, are not contributing to the retirement system or have not completed reinstatement pursuant to section 105 of said chapter 32.

SECTION 4. Notwithstanding section 5 of chapter 32 of the General Laws, an eligible employee shall submit an application to the state board of retirement on or before April 1, 2024 in order for the

employee to be eligible to receive the retirement benefit provided in this act. The retirement date requested in an eligible employee’s application shall be June 30, 2024 or, upon a state university’s local board of trustees’ approval for delay resulting from multiple employees from the same division choosing to participate in this program or university need, a delayed retirement date of no later than December 31, 2024. Employees may rescind their notice of retirement, up to the earlier of: (i) 1 week prior to their submitted retirement date; or (ii) 1 week prior to an offer of employment for a replacement hire in situations where a replacement hire has been approved. The application for retirement may be delivered to the state board of retirement in person, by mail or in a manner as the board may approve, including by electronic means.

SECTION 5. (a) An employee who is eligible for the state universities retirement incentive program may request in the application for retirement that the state board of retirement credit the employee with an additional retirement benefit pursuant to this section. Each such employee shall request and receive a combination of years of creditable service and years of age, in full-credit increments; provided however, that the sum of the years of creditable service and years of age shall not be greater than 6 total credits for the purposes of determining the employee’s superannuation retirement allowance pursuant to paragraph (a) of subdivision (2) of section 5 of chapter 32 of the General Laws. The employee’s state university of record shall pay to the state board of retirement 2.5 per cent of the participant’s highest 3-year annual average salary for each purchased credit up to a maximum of 6 purchased credits towards their retirement benefit, with 6 credits representing the aggregate payment of 15 per cent of the participant’s highest 3-year annual average salary. The program participant shall pay to the state board of retirement 4.5 per cent of the participant’s highest 3-year annual average salary, plus an additional 1.0 per cent of the participant’s highest 3-year annual average salary above $30,000, for each purchased credit (year of age or year of service) up to a maximum of 6 total purchased credits. Such payment, upon the participant’s approval, may be directed from the state university directly to the state board of retirement from compensated absences payouts at the time of the participant’s retirement. Failure of participants to make such payments for the purchase of credits to the state board of retirement shall result in no addition to the participant’s creditable years being considered in the determination of retirement benefits until payments are made.

Notwithstanding the credit, the total normal yearly amount of the retirement allowance, as determined pursuant to said section 5 of said chapter 32, of any employee who retires and receives the program benefit shall not exceed 80 per cent of the average annual rate of the employee’s regular compensation as determined pursuant to said section 5 of said chapter 32.

(b) An employee shall not: (i) be eligible for both of the 2 different retirement incentives as noted in clauses (i) and (ii) of subsection (b) of section 2 (b); (ii) become eligible for 1 incentive by virtue of the application of a different incentive; and (iii) utilize the incentive to qualify for any other rights or benefits under chapter 32 of the General Laws. An employee who retires and receives an additional retirement benefit pursuant to this act shall be considered retired for superannuation purposes under said chapter 32 and shall be subject to said chapter 32. A married employee who retires and receives an additional benefit under this act shall be subject to the requirements of the second paragraph of subdivision (1) of section 12 of said chapter 32.

(c) Notwithstanding paragraph (a) of subdivision (2) of section 5 of chapter 32 of the General Laws, an eligible employee retiring under the state universities retirement incentive program who has served in

more than one group shall receive a retirement allowance as if the employee served only as a Group 1 employee for the entire length of state service and shall not receive a retirement allowance consisting of pro-rated benefits based upon the percentage of total years of service that the employee rendered in each group.

SECTION 6. The state board of retirement shall provide retirement counseling to employees who apply to retire under the state universities retirement incentive program or to eligible employees who request retirement counseling. Counseling services shall be scheduled between December 1, 2023 and April 1, 2024. Counseling by the board shall include, but need not be limited to: (i) a full explanation of the retirement benefits provided by the program; (ii) a comparison of the expected lifetime retirement benefits payable to an employee under the retirement incentive program and under chapter 32 of the General Laws; (iii) the election of a retirement option under section 12 of said chapter 32; (iv) the restrictions on employment after retirement; (v) the laws relative to the payment of cost-of-living adjustments to the retirement allowance; and (vi) the effect of federal and state taxation on retirement income. The group insurance commission shall provide counseling regarding the provision of health care benefits under chapter 32A of the General Laws. Each employee shall sign a statement that the employee has received counseling or has elected not to receive counseling prior to the approval by the board of the employee's application for superannuation benefits and the additional benefit provided by this act.

SECTION 7. Notwithstanding any general or special law or any collective bargaining agreement or other employment contract to the contrary and in consideration of the benefits conferred in this act, an employee who elects to retire under this act shall receive payment for accrued vacation time, buyback of pro-rated unused sick leave, and other benefits under the collective bargaining agreement or other employment contract. The board shall deny an application for the state universities retirement incentive program under this act by an employee who belongs to a bargaining unit for which a collective bargaining agreement inconsistent with this section is in effect at the time of the application unless the employee organization representing the employee has filed with the board and the secretary of administration and finance a statement waiving any inconsistent provisions of the agreement on behalf of all members of the bargaining unit who file applications for the retirement incentive program pursuant to this act.

SECTION 8. Notwithstanding section 91 of chapter 32 of the General Laws, an employee retired under this act may teach on a part-time basis or accept part-time state employment subject only to the limitations provided by law. A member who retired under the state universities retirement incentive program shall be eligible for reinstatement under section 105 of said chapter 32. If an individual who receives an incentive through this program subsequently accepts full-time employment with any state agency, including a state university, the employee shall: (i) repay the cash incentive payment; or (ii) lose the additional creditable years of service or age. If the employee loses the additional creditable years of service or age, the state board of retirement shall repay the state university and employee, as appropriate, for any purchased service and age credits, with no interest, as determined by the state board of retirement.

SECTION 9. Not later than June 1, 2024, the secretary of administration and finance shall file with the house and senate committees on ways and means a report detailing: the number of employee applications received for the state universities retirement incentive program; the anticipated dates of

retirement for each participant; the official positions of the employees; and the impact of program participation on each state university’s ability to carry out its responsibilities as provided by law. Further, this report shall detail the implementation of clauses (i) and (ii) of subsection (b) of section 2, including: (i) the number of employees who plan to separate from state service pursuant to each clause; (ii) the timing of each planned separation; (iii) the official positions of the employees; (iv) the impact that all completed and anticipated separations will have on each state university’s ability to carry out its responsibilities as provided by law; and (v) the estimated net cost-savings in fiscal year 2025 through fiscal year 2028 for each state university associated with implementation of this program.

SECTION 10. Participating state university shall certify, to the state comptroller and the state board of retirement, the following information 15 days prior to the various dates of retirement: (i) the current annual salary as well as the salary at date of retirement of each individual who has enrolled in the state universities retirement incentive program; (ii) the item of appropriation in which the position is funded; (iii) the classification and title of the position; (iv) the retirement date for the person who will retire from the position; and, (v) the amounts of projected accrued vacation time, unused sick leave buyback or other accrued benefits for each employee as of the employee’s date of retirement.

SECTION 11. The executive director of the public employee retirement administration commission, established in section 49 of chapter 7 of the General Laws, shall analyze, study and evaluate the costs and actuarial liabilities attributable to the additional benefits payable pursuant to this act. Not later than September 30, 2028, the commission shall file a report with the secretary of administration and finance, the joint committee on public service and the house and senate committees on ways and means regarding its findings.

SECTION 12. Not later than November 30, 2028, the secretary of administration and finance shall file with the house and senate committees on ways and means a subsequent report detailing: (i) the number of employees participating in the state universities retirement incentive program; (ii) the estimated costs and savings in fiscal year 2025 through fiscal year 2028 as a result of the employees’ participation; and (iii) the number of positions that have been either refilled or not refilled during those periods. For each position that has not been refilled, the report shall detail how the duties and expertise associated with the position have been fulfilled or otherwise accounted for by the state university.

Name:	District/Address:	Date Added:
Carmine Lawrence Gentile	13th Middlesex	1/19/2023
Vanna Howard	17th Middlesex	7/2/2023
Priscila S. Sousa	6th Middlesex	2/6/2024