HomeMy Public PortalAbout06-23-2015 BFO Committee Report Town of Watertown
Town Council Committee of the Budget and Fiscal Oversight
Report of the Meetings of May 11 and June 8,2015
Report Date: June 23,2015
The Committee convened on May 11, 2015 at 7:15 pm in the Town Council Chamber. Present were
Vincent Piccirilli,Chair;Angeline Kounelis,Vice Chair; Cecilia Lenk, Secretary;Michael Driscoll,Town
Manager; and the following members of the Watertown Contributory Retirement Board(WCRB):
Thomas Thibaut, Chair; Town Auditor/Assistant Town Manager for Finance Thomas Tracy,Vice Chair;
John Loughran; and Domenic Arone. Also attending was Thomas Gibson,Attorney for the WCRB.
The purpose of these meetings was to make recommendations to the Town Council on a request from the
WCRB to adopt the following local options(See attached memo from Mr. Tracy dated May 6,2015
which includes relevant sections of a WCRB PowerPoint presentation, and related information from
PERAC, including Massachusetts communities who have passed these local options). The Committee
discussed the following six possible local options:
1. Increase in the COLA base from$12,000 to $13,000(Section 19 of Chapter 188 of the Acts of
2010)
2. Increase in the Section 101 Survivor Allowance from$9,000 to $12,000 (Section 65 of Chapter
139 of the Acts of 2012)
3. Increase in the Option D Minimum Monthly Allowance from$250 to $500 (Sections 29 and 30
of Chapter 176 of the Acts of 2011)
4. Setting a Minimum Retirement Allowance of$15,000 for 25 years of service (Sections 48 of
Chapter 176 of the Acts of 2011)
5. Indemnification of WCRB Board Members(G.L. Chapter 32 Section 20A)
6. Increase in WCRB Board Member compensation up to $4,500 (Section 34 of Chapter 176 of the
Acts of 2011)
Discussion included: purpose of the local options;number of retirees and survivors affected; costs related
to each option;potential impact on the Town's unfunded pension liability and current funding schedule;
lack of compensation provided to other Town boards; and the insurance needs for indemnification. It was
noted by the WCRB that these local options were automatically implemented for state workers and
teachers as members of the state retirement system. Following discussion,the Committee requested the
WCRB provide an actuarial analysis of the proposed COLA base increase and further information on the
insurance options for Board Member indemnification and related costs.
The meeting adjourned at 8:40 pm
The Committee reconvened on June 8,2015 at 6:10 pm in the Town Council Chambers. Present were
Vincent Piccirilli,Chair;Angeline Kounelis,Vice Chair; Cecilia Lenk, Secretary;Michael Driscoll,Town
Manager; and the following members of the Watertown Contributory Retirement Board: Thomas Thibaut,
Chair; Town Auditor/Assistant Town Manager for Finance Thomas Tracy,Vice Chair; and John
Loughran. Also attending was Daniel Sherman, CEO, Sherman Actuarial Services.
Mr. Sherman presented his actuarial valuation and COLA Base increase study(see attached letter from
Mr. Sherman). Mr. Tracy reported that the Town's insurer,MIIA, considers the WCRB a separate entity
and cannot add the WCRB to the Town's insurance policy. The Committee agreed that indemnification of
board members was important and asked Mr. Tracy and the Town Manager to follow up with the Town's
attorney and look at other insurance options. The Committee voted unanimously on the proposed local
options as follows:
Page 1 of 2
1. COLA Base increase from$12,000 to$13,000
Recommend to the full Town Council to adopt this local option and increase the COLA base to $13,000,
subject to the commitment by the WCRB voting to maintain the existing 2019 funding schedule, for the
following reasons:
• Watertown teachers have received this benefit since the law was passed in 2010, so extending the
same benefit to all other town employees is a matter of fairness.
• The cost of this option can be fully absorbed by the increase in actuarial gain over the last two years,
and does not require an increase in appropriation from the Town.
2. Section 101 Survivor Allowance increase from$9,000 to $12,000
Recommend to the full Town Council to adopt this local option and increase this benefit to$12,000, for
the following reasons:
• Watertown teachers have received this benefit since the law was passed in 2012, so extending the
same benefit to all other town employees is a matter of fairness.
• The cost of this option is minor, about$25,000 per year, affecting 16 survivors, and will decrease
over time.
Councilor Kounelis requested a listing by age of the survivors impacted by Section 101that will be
provided by the WCRB to the Committee at a later date.
3. Oration D Minimum Monthly Allowance increase from$250 to $500 - Sections 29 &30 of Chapter 176
of the Acts of 2011
Recommend to the full Town Council to adopt this local option and increase this benefit to $500, for the
following reasons:
• This option has remained at$250 for a long time and has not been updated, so this is a social equity
issue.
• The cost of this option is minor, about$65 per month, effecting one survivor, and will decrease over
time.
4. Minimum Retirement Allowance of$15.000 for 25 vears of service
Recommend to the full Town Council to not adopt this local option, for the following reasons:
• The public policy justification for this local option is not provided by the legislature, and there does
not appear to be any inequity that needs to be corrected. At best, it appears to potentially reward
elected officials,who could gain an annual pension of$15,000 on an annual salary of$5,000.
5. Indemnification of Board Members
• This was tabled to a future meeting as Mr. Tracy is still waiting for information insurance options and
related costs.
6. Board Member compensation increase up to $4,500
Recommend to the full Town Council to adopt this local option to increase the retirement board
compensation from $3,000 to $4,000, for the following reasons:
• The increase in compensation is due, in part, for recognition the WCRB's commitment and efforts to
maintain the 2019 funding schedule as a priority for the Town Council.
• The cost of this option is minor, $5,000/year, and will be paid from fund expenses.
The meeting adjourned at 6:50 pm
Submitted by Cecilia Lenk
Page 2 of 2
Kerman
�- ctuarlal
Services
June 2,2015
Barbara Sheehan,Director
Watertown Contributory Retirement System
Administration Building
149 Main Street
Watertown,MA 02472
Re: 2015 Actuarial Valuation Results and COLA Study
Dear Barbara:
As requested, we have performed an actuarial valuation of the Watertown Retirement System as of January
1, 2015. We also completed a study of the costs to increase the COLA base from $12,000 to $13,000. In
the table below we provide the principal results and compares them to 2013.
1/1/2013 1/1/2015
$12,000 $13,000
Normal Cost—Employee 2,358,651 2,664,344 2,664,344
Normal Cost—Employer 1,203.742 1.231,254 1,247.925
Total Normal Cost 3,562,393 3,895,598 3,912,369
Accrued Liability 165,337,832 178,804,367 179,565,651
Assets 104,733,204 131,853,857 131,853,857
Unfunded Accrued Liability 60,604,628 46,950,510 47,711,794
Funded Ratio 63.3% 73.7% 73.4%
FYE17 Appropriation 15,348,496 14,960,401 15,279,109
FYE18 Appropriation 16,923,496 15,596,371 15,929,331
FYE19 Appropriation 17,695,151 16,259,616 16,607,465
FYE20 Appropriation 2,026,892 2,029,992 2,050,259
An increase in the COLA base to $13,000 will increase the costs of the plan. However, during the two year
period ending December 31, 2014, the system realized an actuarial gain of$9,213,244, primarily due to
superior investment returns. This accounts for the substantial decrease in the Unfunded Accrued Liability
and the increase in the Funded Ratio. Watertown could use this gain to reduce it's funding of the plan, or
increase the benefits to the current and future retirees. As shown above, the actuarial gain is large enough
to offset the cost increase in the COLA base for FYE17,FYE 18 and FYE19.
There is another important consideration in the increase of the COLA base. Since any change will occur
after January 1, 2015, it will not be recognized in my valuation report and will not be included in the
funding schedule. It will be recognized in the next valuation, either 2016 or 2017, then reflected in the
funding schedule starting with FYE18 or FYE19. That said, both PERAC and I strongly recommend that
the effect of the increase in the COLA base be somehow reflected in the FYE 17 appropriation if it is
expected to be adopted this year. This will smooth the impact on the funding schedule over three years,
rather than one or two.
Ms. Barbara Sheehan
June 2,2015
Page 2
Let me know if you have any questions regarding these calculations, or need additional assistance.
Sincerely,
Daniel W. Sherman,ASA,MAAA,EA
CEO
TOWN OF
1630 WATERTOWN
Office of the Town Auditor
Administration Building
149 Main Street
Watertown, MA 02472
Phone: 617-972-6460
www.watertown-nia.gov
Thomas J. Tracy ttracy0watertown-nia.gov
Town Auditor
TO : Vincent Piccirilli , Chair of Budget and Fiscal Oversight
Angeline Kounelis , Vice Chair of Budget and Fiscal Oversight
Cecilia Lenk , Secretary of Budget and Fiscal Oversight
FROM : Thomas Tracy, Town Auditor and Vice Chair of the WCRB
DATE : May 6 , 2015
RE : Retirement Board Local Options
For your information and review, attached is a copy of the FY 15 Watertown Contributory Retirement
Board 's (WCRB) power point presentation pages 16 to 25 related to Retirement Board Local Options .
Please note my updated handwritten comments .
Additionally, attached is information from Public Employee Retirement Administration Committee
( PERAC) website on five of the six Local Options .
The following summarizes each of the Local Options:
COLA Base increase :
Currently the WCRB is restricted in granting a Cost of Living Adjustment (COLA) to retirees and
surviving spouses to 3% of the first $ 12 , 000 . This local option would allow the WCRB to grant a
COLA of 3% of a higher dollar amount (in $ 1 , 000 increments) . The WCRB's Actuary Dan Sherman
estimates the annual cost to be approximately $ 170 , 000 ,
Watertown Retired Teachers and their surviving spouses currently receive a COLA of 3% of the first
$ 13 , 000 because their pensions are paid from the Commonwealth's Teachers Retirement Board ,
Section 101 Survivor Allowance increase :
Surviving spouses of accidental disability retirees who died from a cause that was unrelated to their
disabling injury or illness are currently entitled to a minimum annual pension of $9, 000 . This local
option would increase the annual minimum from $9 , 000 to $ 12 , 000 , The estimated annual cost for
this local option to be $25 , 000 .
The WCRB currently has 16 survivors in this category.
Minimum Oation D Monthly Allowance increase :
Section 12 (2) (d) benefits are paid to survivors of members who die while actively employed . The
current minimum monthly allowance is $250 . This local option would increase the minimum monthly
allowance to $ 500 .
Currently the WCRB has only one survivor receiving a monthly benefit that is below $500 . If the local
option was approved , the cost to the retirement system would be an increase of $65 .45 per month .
Minimum Allowance for Retirees with Excess of 25 Years of Creditable Service :
This local option would establish an annual $ 15 , 000 minimum retirement allowance for retirees who
have at least 25 years of creditable service.
The WCRB currently has two retirees within this category. One is a Town retiree and the other is a
Watertown Housing Authority retiree . The cost of this local option would be an increase in the
monthly pension payroll of $ 1 , 577,
Indemnification of Board Members :
This local option would allow a retirement board member to be indemnified for damages to the same
extent as provided for other public employees under Mass General Law Chapter 258 , the Torts Claim
Act, in civil actions which may arise from acts taken within the scope of the member's official duties .
Other than a possible increase in the Town's Insurance premium , which I have requested a quote,
there is no cost for this local option .
Retirement Board Members Compensation :
In recognition of the increased responsibilities and accountability of Board Members as a result of
recent Pension Reform Acts, a local option was created allowing for an increase in Board Members
compensation in an amount of not less than $3 , 000 and not more than $4 , 500 per year.
Currently the WCRB Board Members receive $3 , 000 and are paid from funds under control of the
Board . If the local option was adopted , the maximum additional cost would be $ 1 , 500 per year per
board member or a total maximum cost of $7, 500,
The WCRB looks forward to reviewing each of these local options in greater detail with the Town
Council's Sub-committee of Budget and Fiscal Oversight ( BFO) on Monday night May 11 , 2015 . The
WCRB is hopeful to achieve the BFO favorable recommendation to the Honorable Town Council on
all six local options.
Please contact me with any questions or concerns .
cc: Michael J . Driscoll , Town Manager
Watertown Contributory Retirement Board
16]0
Vatertoirou Coutributorp Retirement goarb
Local Options
CI COLA
Increase in 101 Benefits
C3� Increase in Minimum Option D Monthly Allowance
• Minimum allowance for Retirees with Excess of 25 Years of
Credible Service
CS> Indemnification of Board Members
• Retirement Board Members Compensation
16
:ox
VatertoWn Contributory Retirement jBoarb
Local Options
COLA Base
• Section 103 (j ) of M . G . L. Chapter 32, as amended by Section 19 of Chapter 133 of
the Acts of 2010 provides authority to municipalities and retirement boards to
increase the COLA base in increments of $ 1, 000 . 00 for members and surviving
spouses receiving retirement allowances on June 30t " of the prior fiscal year.
• If increased from the first $ 12, 000 to the first $ 13 , 000 of retirement allowances,
this will bring equity to retirees of the Town of Watertown following enactment of
Chapter 176 of the Acts of 2011, which automatically increased the COLA base for
retirees of the MA State Teachers Retirement System and the MA State Employees
Retirement System to $ 13 , 000 .
• An estimate for Watertown to increase to a $ 13 , 000 COLA Base would be an
additional appropriation of $ 15e$66:"
17c, Wd
17
VatertoWu Coutributorp retirement 36oarb
Local Options
COLA Base /
18, 000 S !i ll k�
16, 000
14, 000
12, 000
10, 000
8, 000
6, 000
4, 000
2, 000
0
�
°h
� s
iow .
Vatertohlln CContributorp Refirr >ement 3BDaxb
Local Options
Chapter 139 of the Acts of 2012
• A local option is now available to raise the $ 9 , 000 Section 101 survivor
allowance to $ 12 , 000 .
• Recipients are spouses of accidental disability retirees who died from a
cause that was unrelated to their disabling injury or illness .
• The Section 101 survivor allowance is provided to the spouse of a
disability retiree who retired prior to 1996 and was legally precluded from
selecting a retirement option which could have provided a monthly
pension benefit to their spouse ; Option C .
�a
:ate
Local Options
Chapter 139 of the Acts of 2012 cont .
• The Section 101 allowance is not available to spouses of post -
1996 accidental disability retirees as they were given the choice
to select Option ( C ) .
• This benefit will eventually no longer require funding .
• The initial annual cost for this Local Option would be no more
than $ 25 , 000 d+/e � /Ale, v vacs ��e� 5 Ci�Ty�✓ y
20
VatertoWn Contributorp Retirement jgoarb
Local Options
Chapter 176 of the Acts of 2011
• Sections 29 & 30 create local option that would increase the minimum
monthly allowance contained in G . L. c . 32 s . 12 ( 2 ) ( d ) from $ 250 to $ 500 .
• Section 12 ( 2 ) ( d ) benefits are paid to survivors of members who die while
actively employed . The benefit is equal to the yearly amount of the option
( c ) allowance to which such member would have been entitles had his or
her retirement taken place on the date of death .
• Payment of the increased benefit to eligible recipients is prospective only.
Subsequent to the 3 % COLA being granted on 07/01/ 1)(, only ONE survivor
would be eligible for an increase totaling $ / MO . S
G ^ uS
21
:aao
Vatertokou Contributorp Retirement Boarb
Local Options
Chapter 176 of the Acts of 2011
• Section 48 amends G . L. c . 32 S90D by adding a local option which would
establish a $ 15, 000 minimum retirement allowance for retirees with in
excess of 25 years of creditable service .
• Payment of the increased benefit to eligible recipients is prospective upon
acceptance .
• The Watertown Retirement System currently has TWO supAverrs who
would be impacted by acceptance of the laws as amended . Subsequent to
the 3 % COLA bein 07 01 s
g granted on / / 1�; acceptance would increase the
System 's monthly pension payroll by $ 633n
5y71 cf Ja w
7f. ly
, ' 22
:asa
VatertoWn Contributorp Retirement jBoarb
Local Options
Indemnification of Board Members
• Provides that a retirement board member may be indemnified for
damages to the same extent as provided for public employees under G . L.
c . 258, the Tort Claims Act, in civil actions which may arise from acts taken
within the scope of the member 's official duties .
• Indemnification would be prohibited where there is shown to be a breach
of fiduciary duty, an act of willful dishonesty, or a violation of law by the
member.
• Acceptance of this would allow the retirement board members the
protections afforded to all other public employees and officials of the
Town of Watertown , by affording the board members the indemnification
and other protective provisions of G . L . c . 258 .
z3)
iaao
tP �tD � I� eontrfttorp Retirement gDarb
Local Options
Retirement Board Members Compensation
Chapter 176 of the Acts of 2011
• The Pension Reform Act requires that Board Members follow;
Enhance procurement requirements
— Increase fiduciary oversight of the system's operations
Complete annual mandatory education and training
File annual statements of financial interest
Acknowledge compliance with the Conflict of Interest and Retirement Laws
• In recognition of the increased responsibilities and accountability of Board
Members, a Local Option provides for a stipend for Board Members in the amount
" not less that $ 3, 000 and not more that $ 4, 500 per year "
• Stipends are paid from funds under the control of the Board
24
PERAC Local Options - INCREASE COLA BASE ( 17) Page 1 of 3
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❑ INCREASE COLA BASE NEWSHASH
'I
Accessibility PERAC PENSION NEWS
Download Tools This local option allows systems to increase the base upon which the Cost of Living
Increases are based in multiples of $1000. ANNUAL REPORT
Boards that have increased the COLA base are listed below along with the year the
current base became effective. For historical information on an individual board's RETIREMENT GUIDES
base, click on the name of the board.
• G.L. c. 32, § 103(j) o SEARCH
• Section 19 of Chapter 188 of the Acts of 2010
• PERAC Memo #33/ 2010 IN PERAC
Search .
I
A
Fiscal
COLA Base Year
Above $12,000 Eff. Date
Adams Retirement Board $ 14,000 2013
Amesbury Retirement Board
Andover Retirement Board
Arlington Retirement Board $ 15,000 2014
Attleboro Retirement Board
Barnstable County Retirement Board $15,000 2014
Belmont Retirement Board
Berkshire County Retirement Board $14,000 2012
Beverly Retirement Board
Blue Hills Regional School Retirement Board $16,000 2012
Boston Retirement Board $13,000
Braintree Retirement Board
Bristol County Retirement Board $17,000 2015
Brockton Retirement Board
Brookline Retirement Board $13,000 2012
Cambridge Retirement Board $14,000 2013
Chelsea Retirement Board
Chicopee Retirement Board $15,000 2014
Clinton Retirement Board $14,000 2013
Concord Retirement Board
IJ Top al Ihn Paq=
http : //www.iiiass . gov/perac/local/boardopt 17 .htm 5/6/2015
PERAC Local Options - INCREASE COLA BASE ( 17) Page 2 of 3
D
Danvers Retirement Board
Dedham Retirement Board $13,000 2015
Dukes County Contributory Retirement System $14,000 2014
F
Easthampton Retirement Board $14,000 2016
Essex Regional Retirement Board $13,000 2013
Everett Retirement Board $14,000 2013
1
Fairhaven Retirement Board
Fall River Retirement Board
Falmouth Retirement Board
Fitchburg Retirement Board
Framingham Retirement Board
Franklin Regional Retirement Board $15,000 2014
Ll Top of the Pig&,
U
Gardner Retirement Board $13,000 2013
Gloucester Retirement Board $14,000 2012
Greater Lawrence Sanitary District Retirement Board
Greenfield Retirement Board $14,000 2012
H
Hampden County Retirement Board $18,000 2013
Hampshire County Retirement Board $13,000 2014
Haverhill Retirement Board
Hinigham Retirement Board
Holyoke Retirement Board
Hull Retirement Board
L
Lawrence Retirement Board
Leominster Retirement Board
Lexington Retirement Board
Lowell Retirement Board $15,000 2015
Lynn Retirement Board $14,000 2014
U Tap of the Pogr�.___Y____
M
Malden Retirement Board $14,000 2015
Marblehead Retirement Board
Marlborough Retirement Board
Mass Housing Finance Agency Retirement Board $13,000 2013
Mass Port Authority Retirement Board $13,000 2013
Mass Water Resources Authority Retirement Board
Maynard Retirement Board $15,000 2013
Medford Retirement Board $16,000 2013
Melrose Retirement Board
Methuen Retirement Board $ 14,000 2014
Middlesex County Retirement Board $14,000 2013
Milford Retirement Board $13,000 2013
Milton Retirement Board $15,000 2012
Minuteman Regional School District Retirement $130000 2013
Board
Montague Retirement Board $18,000 2012
N
Natick Retirement Board
Needham Retirement Board
New Bedford Retirement Board
Newburyport Retirement Board
http ://www.mass .gov/perac/local/boardopt_ l7 .htm 5/6/2015
PERAC Local Options - INCREASE COLA BASE ( 17) Page 3 of 3
Newton Retirement Board
Norfolk County Retirement Board $15,000 2012
North Adams Retirement Board $13,000 2012
North Attleboro Retirement Board
Northampton Retirement Board $13,000 2012
Northbridge Retirement Board $14,000 2012
Norwood Retirement Board $14,000 2013
U Top of the Page
P
Peabody Retirement Board
Pittsfield Retirement Board $14,000 2012
Plymouth Retirement Board $14,000 2012
Plymouth County Retirement Board $13,000 2013
Q
Quincy Retirement Board
R
Reading Retirement Board
Revere Retirement Board
S
Salem Retirement Board
Saugus Retirement Board
Shrewsbury Retirement Board
Somerville Retirement Board
Southbridge Retirement Board
Springfield Retirement Board $13,000 2014
Stoneham Retirement Board $13,000 2012
Swampscott Retirement Board $13,000 2012
N Top of the Page
I
Taunton Retirement Board $14,000 2012
VY
Wakefield Retirement Board
Waltham Retirement Board $14,000 2012
Watertown Retirement Board
Webster Retirement Board $16,000 2013
Wellesley Retirement Board $15,000 2014
West Springfield Retirement Board $13,000 2013
Westfield Retirement Board $13,000 2014
Weymouth Retirement Board
Winchester Retirement Board
Winthrop Retirement Board
Woburn Retirement Board
Worcester Retirement Board $13,000 2012
Worcester Regional Retirement Board $14,000 2012
COLA Base Fiscal
Above Year
$12,000 Eff. Date
❑ Top of the Page
http : //www.mass.gov/perac/local/boardopt_17 .htm 5/6/2015
Memo Page 1 of 2
MEMORANDUM #33 , 2010
Commonwealth of Massachusetts I Public Employee Retirement Administration
Commission
Five Middlesex Avenue, Suite 304, Somerville, MA 02145
Ph 617 666 4446 1 Fax 617 628 4002 1 TTY 617 5918917 1 www.mass. gov/perac
Domenic J. F . Russo, Chairman I A. Joseph DeNucci, Vice Chairman
Paul V . Doane I James M. Machado I Donald R. Marquis I Robert B . McCarthy
Gregory R. Mennis
Joseph E. Connarton, Executive Director
MEMORANDUM
TO : All Retirement Boards
FROM: Joseph E. Connarton, Executive Director
RE : Chapter 188 of the Acts of 2010
DATE : August 12, 2010
Chapter 188 of the Acts of 2010, An Act Relative to Municipal Relief, contained a
number of provisions pertaining to public pensions . That measure became effective on
July 27, 2010 . Under separate cover we have outlined those sections of the legislation
dealing with the ERI (PERAC Memorandum #32 issued August 2, 2010) . This memo
addresses actuarial funding and COLA sections of the new law. However, this memo
is not a substitute for a careful reading of the law (attached) .
Sections dealing with retirement system funding schedules are largely based on a
recommendation of the PERAC Actuarial Advisory Committee . Although, in present
circumstances, this may appear to be a change designed to mitigate pension
appropriation increases in difficult times, the original work regarding this matter was
conducted in an effort to update prior law regarding schedules.
Actuarial Vahtations
Sections 16 and 71 require that each system conduct an actuarial valuation at least once
every two years . It also requires that experience investigations be conducted once
every six years . These valuations and experience studies shall be conducted in a
manner that the PERAC Actuary deems appropriate . The first valuation to be
conducted under this requirement shall be completed by the earlier of January 1 , 2011
or January 1 , of the third year following the last actuarial valuation of the system.
http ://www.mass . gov/perac/ lOmemos/33 10 .html 5/6/2015
Memo Page 2 of 2
Funding Schedules
Section 17 provides that the yearly payment provided for in any funding schedule
established under G.L. c . 32, § 22D shall not be less than 95 % of the amount
appropriated in the prior fiscal year.
Section 18 establishes G .L . c . 32, § 22F which allows for systems to adopt a funding
schedule that reduces the unfunded actuarial liability of the system to zero no later than
June 30, 2040 within the following constraints : 1 ) the payment in any year of any
revised or subsequent schedule is not less than the payment in the prior fiscal year,
until the system is fully funded, and 2) the maximum annual increasing basis to
amortize the unfunded actuarial liability is 4 . 0% . If a revised schedule could be
developed with reduced payments, then the length of the schedule must be shortened
until the payment is not less than that of the prior fiscal year. If a schedule is
developed under this section that would result in an appropriation in the first year of the
schedule that is more than 8 . 0% greater than the prior fiscal year, then the 4 . 0%
increasing basis of the amortization of the unfunded actuarial liability can be adjusted
with PERAC ' s approval . A system that adopts a funding schedule under this section
may also increase the maximum base on which COLAs can be calculated in accordance
with G .L . c. 32, § 1030) (see next section) and incorporate the costs of that increase in
its schedule .
COLA
Under the provisions of Chapter 32, Section 103 0 ) inserted by Section 19 of Chapter
188 systems may increase the maximum base on which the cola is calculated in
multiples of $ 1 ,000 . Presently that amount is $ 12,000 . Each increase must be accepted
by a majority vote of the retirement board approved by the legislative body. In the case
of a city the legislative body is the city council, in a town it is the town meeting, in a
district it is the district body and in an authority it is the governing body. In a county or
region acceptance will be by the county or regional retirement board advisory council .
Acceptance is deemed to have occurred upon filing of a certification of the vote of the
legislative body with PERAC. A decision to accept an increase cannot be revoked.
Attachment
Return to PERAC Home Paize
http ://www. mass .gov/perac/ 1 Omemos/3310.html 5/6/2015
PERAC Local Options - INCREASE IN § 101 BENEFIT Pagel of 3
Masse
IF
PUBLIC a� oil uMENT ADMINISTRATION • • Contact PERAC
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91A Earned Income
Privacy Policy u INCREASE IN § 101 BENEFIT TO $ 12, 000 NEWSFLASH
Accessibility PERAC PENSION NEWS
Download Tools This local option provides for an increase to $12,000 in the annual allowance payable under G.L.
c. 32, s. 101. The Increase begins upon the filing of a certification of vote with the Commission. ANNUALREPORT
• G.L. a 32. § 101
• Section 65 of Chapter 139 of the Acts of 2012 RETIREMENTGUIDES
• PERAC Memo #43/2012
■ SEARCH
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In PERAC LA
n Search
Adams Retirement Board N
Amesbury Retirement Board N
Andover Retirement Board N
Arlington Retirement Board N
Attleboro Retirement Board Y
U
Barnstable County Retirement Board Y
Belmont Retirement Board N
Berkshire County Retirement Board Y
Beverly Retirement Board N
Blue Hills Regional School Retirement Board N
Boston Retirement Board Y
Braintree Retirement Board N
Bristol County Retirement Board Y
Brockton Retirement Board Y
Brookline Retirement Board N
C
Cambridge Retirement Board N
Chelsea Retirement Board N
Chicopee Retirement Board N
Clinton Retirement Board N
Concord Retirement Board N
U Top of the Page ---- - - --
L1
Danvers Retirement Board N
Dedham Retirement Board Y
Dukes County Contributory Retirement System Y
http ://www.mass . gov/perac/local/boardopt_ 13b .htm 5/6/2015
PERAC Local Options - INCREASE IN § 101 BENEFIT Page 2 of 3
Easthampton Retirement Board Y
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Board
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PERAC Local Options - INCREASE IN § 101 BENEFIT Page 3 of 3
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Memo Page I of 1
MEMORANDUM #43 , 20122
Commonwealth of Massachusetts I Public Employee Retirement Administration
Commission
Five Middlesex Avenue, Suite 304, Somerville, MA 02145
Ph 617 666 4446 1 Fax 617 628 4002 1 TTY 617 591 8917 www.mass . gov/perac
Domenic J. F . Russo, Chairman
Auditor Suzanne M. Bump I Alan Macdonald I James M. Machado I Donald R. Marquis
Robert B . McCarthy I Gregory R. Mennis
Joseph E. Connarton, Executive Director
MEMORANDUM
TO : All Retirement Boards
FROM: Joseph E . Connarton, Executive Director
REi Local Option Increase to Benefits Payable to Widows and Widowers of
Disabled Public Employees under § 101 (Chapter 139 of the Acts of 2012)
DATE : August 1 , 2012
The recently enacted FY13 State Budget (Chapter 139 of the Acts of 2012) contained
Sections 63 , 64 and 65 , all addressing the benefits payable to certain surviving spouses
of disabled employees pursuant to G.L . c . 32, § 101 . A local option is now available to
raise this benefit to $ 12,000 . (Chapter 32, § 101 now contains the statutory $6,000
benefit as well as a $9,000 supplemental allowance summarized in PERAC Memo
#28 / 2010).
The new $ 12,000 local option must be adopted by the local board and approved by the
legislative body. Acceptance shall be deemed to have occurred upon the filing of a
certification of such votes with the Commission. Upon acceptance, the allowances of
all individuals receiving an allowance pursuant to G .L . c. 32, § 101 will be increased to
$ 12,000 . This provision can be accepted at any time . If the acceptances do not take
place, the allowance remains payable at either $6,000 per year or $9 ,000 if the 2010
local option was properly implemented .
The State Teachers ' and State Employees Retirement Systems shall be deemed to have
accepted the new local option, effective July 1 , 2012 .
We trust the foregoing will be of some assistance to you.
http ://www.mass .gov/perac/ 12memos/4312 .html 5/6/2015
General Laws : CHAPTER 32, Section 101 Page 1 of 2
\� . I
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Section 101 Allowance to widows of disabled public employees; supplemental
annual allowance
PREY NEXT
Section 101, In the event of the death of any former employee who had been retired under
the provisions of this chapter after having been found to be Incapacitated for further duty by
reason of injuries sustained while In the performance of his duties, or who had been retired for
ordinary disability under the provisions of this chapter, under which retirement he was unable
to provide for any annual allowance to be paid to his widow at the time of his death, there
shall be paid to such widow an annual allowance In the amount of either $6,000 or, in a
retirement system accepting the supplemental annual allowance as provided in this section, -
$9,000, or, In a retirement system accepting the supplemental annual allowance provided in
the third paragraph, $12,000, subject to the provisions of paragraph (e) of section one
hundred and two; provided, however, that any allowance payable under this section shall be
in the alternative to any allowance to which such widow would be entitled under the provisions
of any other section of this chapter. Any allowance which such widow may be receiving or any
allowance which she may have potential rights to receive, based on her own service to the
commonwealth or any political subdivision thereof, shall not make her Ineligible to receive the
allowance provided in this section. The allowance provided by this section shall be paid by the
same retiring authority and from the same source as the allowance payable to the deceased
former employee referred to in this section .
Notwithstanding the previous paragraph, a retirement system may accept a supplemental
annual allowance fixed at the rate of $9,000, by a majority vote of the board of each such
system, subject to the approval of the legislative body thereof. For the purposes of this
section, "legislative body" shall mean, in the case of a city, the city council In accordance with
Its charter, in the case of a town, the town meeting, In the case of a county, the county
retirement board advisory council, In the case of a region, the regional retirement board
advisory council, in the case of a district, the district members and, in the case of an
authority, the governing body of such authority. Acceptance shall be deemed to have occurred
upon the filing of a certification of such votes with the commission.
https ://malegislature . gov/Laws/GencralLaws/Pai tI/TitleIV/Chapter32/Section. . . 5/6/2015
General Laws : CHAPTER 32, Section 101 Page 2 of 2
Any retirement system may accept the supplemental annual allowance, provided for by this
paragraph and fixed at the rate of $ 12,000, by a majority vote of the board of each such
system, subject to the approval of the legislative body. Acceptance shall be deemed to have
occurred upon the filing of a certirication of such votes with the commission. For purposes of
this section, the state teachers' and state employees' retirement systems shall be deemed to
have accepted this paragraph.
Mess.aov I siteAhef r MWMeV I Cwtact Us Copyright® 2015 The Genefat Court, All Rights Reserved
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PERAC Local Options - CHAPTER 176 OF TIE ACTS OF 2011 : INCRE . . . Page 1 of 3
Mass. / , > I
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• G.L. c. 32, § ANNUAL 2EPORT
30 of C
• Section 29 & 30 of Chapter 176 of the Acts of 2011
• PERAC Memo #14/2012
RETIREMENT GUIDES
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PERAC Local Options - CHAPTER 176 OF THE ACTS OF 2011 : INCRE . . . Page 2 of 3
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1 -1
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PERAC Local Options - CHAPTER 176 OF THE ACTS OF 2011 : INCRE. . . Page 3 of 3
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yV
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West Springfield Retirement Board N
Westfield Retirement Board Y
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Winchester Retirement Board N
Winthrop Retirement Board N
Woburn Retirement Board N
Worcester Retirement Board N
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Top el me PaUA*
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Memo Page I of 1
MEMORANDUM # 14 , 2012
Commonwealth of Massachusetts I Public Employee Retirement Administration
Commission
Five Middlesex Avenue, Suite 304, Somerville, MA 02145
Ph 617 666 4446 1 Fax 617 628 4002 1 TTY 617 591 8917 1 www.mass . gov/perac
Domenic J. F . Russo, Chairman
Auditor Suzanne M. Bump I Alan Macdonald I James M. Machado I Donald R. Marquis
Robert B . McCarthy I Gregory R. Mennis
Joseph E . Connarton, Executive Director
MEMORANDUM
TO : All Retirement Boards
FROM: Joseph E . Connarton, Executive Director
RE : Local Option Increasing Minimum Allowance in G.L . c. 32, § 12 Sections 29
and 30 of Chapter 176 of the Acts of 2011
DATE : January 19, 2012
This is to advise you that Sections 29 and 30 of Chapter 176 of the Acts of 2011
created a local option that will increase the minimum monthly allowance contained in
G.L . c . 32, § 12(2)(d) from $250 to $500 . This section becomes effective on February
16, 2012 and can be adopted at any time after that date .
The local option to increase the minimum allowance must be accepted by a majority
vote of the Retirement Board and by the legislative body. The legislative body in a city
is the city council subject to its charter; in a town, the town meeting; in a county, the
county retirement board advisory council; in a region, by a vote of the regional
retirement board advisory council; in a district, the district members ; and for an
authority, its governing body .
Acceptance shall be deemed to have occurred upon the filing of a certification of such
vote with the Commission. Payments to eligible recipients will commence,
prospectively, on that date . No benefits may be paid for periods prior to the filing of
the certification with the Commission.
If you have questions, please contact this office .
http ://www.mass . gov/perac/12memos/ 1412 .html 5/6/2015
PERAC Local Options - INDEMNIFICATION OF RETIREMENT BOAR. . . Page 1 of 3
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This local option allows Board Plembers to be indemnified for costs and damages in civil actions
unless it is shown that there was a breach of the Board Member's fiduciary Duty, an act of ANNUAL REPORT
willful dishonesty or an Intentional violation of the law.
RETIREMENT GUIDES
• G. L. c. 32, § 20A
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PERAC Local Options - INDEMNIFICATION OF RETIREMENT BOAR. . . Page 2 of 3
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N
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Newton Retirement Board Y
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North Adams Retirement Board N
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PERAC Local Options - INDEMNIFICATION OF RETIREMENT BOAR. . . Page 3 of 3
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General Laws : CHAPTER 32 , Section 20A Page 1 of 1
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Section 20A Civil action against board member; expenses and damages;
Indemnification
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Section 20A. In any city, town or other entity which accepts the provisions of this section, in a
city, by a vote of the city council with the approval of the mayor; in a town, by a vote of the
town meeting; in a municipality having a town council form of government, by a vote of the
town council; and in any other entity having a retirement board subject to the provisions of
this chapter, by a vote of the governing board of such entity, any civil action brought against
a member of a retirement board, the defense or settlement of which action Is made by an
attorney employed by the retirement board, such member shall be Indemnified for all
expenses Incurred in the defense thereof and shall be Indemnified for damages to the same
extent as provided for public employees in chapter two hundred and fifty-eight; provided,
however, that the claim arose out of acts performed by such member or members while
acting within the scope of his official duties; and provided, further, that no member of a
retirement board shall be Indemnified for expenses Incurred in the defense of an action, or
damages awarded in such action, In which there is shown to be a breach of fiduciary duty, an
act of willful dishonesty or an intentional violation of law by such member.
Mass. oy Site Mee site Pori I Contact Us
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appropriate legislative body, to receive a stipend, provided the stipend is not less ANNUALREPORT
than $3,000 per year and not more than $4,500 per year.
• G.L. c. 32, § 20(6) RETIREM.ENr GUIDES
• Section 34 of Chapter 176 of the Acts of 2011
• PERAC Memo #2/2012 ❑ SEARCH
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1)
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t
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(' I Top ul wV Pa:
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PERAC Local Options - RETIREMENT BOARD MEMBER COMPENS . . . Page 2 of 3
I .
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1
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I� Tvp of wN Pwj` - -
�7
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( I
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Mass Water Resources Authority Retirement Board N
Maynard Retirement Board N
Medford Retirement Board Y ($4,500)
Melrose Retirement Board Y ($3,000)
Methuen Retirement Board Y ($3,000)
Middlesex County Retirement Board Y ($4,500)
Milford Retirement Board N
Milton Retirement Board N
Minuteman Regional School District Retirement Board Y ($3,000)
Montague Retirement Board Y ($4,000)
N
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Needham Retirement Board N
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Newburyport Retirement Board Y ($4,500)
Newton Retirement Board Y ($3,000)
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North Adams Retirement Board N
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Northampton Retirement Board Y ($3,000)
Northbridge Retirement Board N
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PERAC Local Options - RETIREMENT BOARD MEMBER COMPENS . . . Page 3 of 3
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Peabody Retirement Board Y ($3,000)
Pittsfield Retirement Board Y ($3,000)
Plymouth Retirement Board N
Plymouth County Retirement Board Y ($3,000)
Quincy Retirement Board Y ($3,000)
R
Reading Retirement Board N
Revere Retirement Board Y ($3,000)
S
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Saugus Retirement Board N
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Stoneham Retirement Board N
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U Top 41 the Page
T
Taunton Retirement Board Y ($4,500)
UV
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Wellesley Retirement Board N
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Winchester Retirement Board N
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Memo Page 1 of 2
MEMORANDUM #02 , 2012
Commonwealth of Massachusetts I Public Employee Retirement Administration
Commission
Five Middlesex Avenue, Suite 304, Somerville, MA 02145
Ph 617 666 44461 Fax 617 628 4002 1 TTY 617 591 8917 1 www.mass.gov/perac
Domenic J. F . Russo, Chairman
Auditor Suzanne M. Bump I Alan Macdonald I James M. Machado I Donald R. Marquis
Robert B . McCarthy I Gregory R. Mennis
Joseph E. Connarton, Executive Director
MEMORANDUM
TO : All Retirement Boards
FROM : Joseph E. Connarton, Executive Director
RE : Local Option Increasing Board Members ' Stipend Section 34 of Chapter 176
of the Acts of 2011
DATE : January 5 , 2012
As you know, Section 34 of Chapter 176 of the Acts of 2011 re-wrote G.L. c. 32, § 20
(6) creating a new local option provision that replaces the current $3 ,000 local option
and allows for an increase in the stipend paid to members of Retirement Boards . The
language of this section that becomes effective on February 16, 2012 is set forth
below. It can be adopted at any time after February 16, 2012.
The local option allows the Board Member stipend to be increased to an amount not
less than $3 ,000 and not more than $4, 500 . If the local option is accepted, the ex
officio Board Member shall receive an annual stipend of not more than $4, 500 in the
aggregate for services rendered in the active administration of the Retirement System .
It should be noted that the ex offrcio Board member cannot receive more than the
amount accepted by the local option. For example, if he or she is receiving $ 1 , 500 for
services rendered in the active administration the system pursuant to G.L. c. 32 § 20, he
or she may receive the stipend in an amount so that the aggregate of the payments for
services and the stipend equals the total amount of the Board Member Compensation.
This local option is accepted by a vote of the legislative body. The legislative body in a
city is the city council subject to its charter; in a town, the town meeting; in a county,
the county retirement board advisory council; in a region, by a vote of the regional
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Memo Page 2 of 2
retirement board advisory council; in a district, the district members; and for an
authority, its governing body. The Retirement Board is not included in the acceptance
process, but may wish to bring the availability to the attention of the legislative body.
The Retirement Board must notify the Commission of the local legislative body' s
acceptance and provide certified copies of the votes.
If the Board has adopted the local option that is contained in G.L. c. 32, § 20(6) prior to
the amendment, that acceptance remains in effect. In order to increase the stipend to an
amount up to $4, 500, the new local option must be accepted. If the Board has not
accepted the $3 , 000 local option, the new option can be accepted as outlined in the
statute. In either case, the amount of the stipend (from $3 , 000 to $4, 500) must be
included in the acceptance vote .
Section 34 of Chapter 176 of the Acts of 2011
SECTION 34 Said section 20 of said chapter 32, as so appearing, is hereby further
amended by striking out subdivision (6) and inserting in place thereof the following
subdivision: -
(6) Retirement Board Members Compensation.-The elected and appointed members of
a city, town, county, regional, district or authority retirement board upon the
acceptance of the appropriate legislative body shall receive a stipend; provided,
however, that the stipend shall not be less than $3 ,000 per year and not more than
$4,500 per year; provided, further, that the stipend shall be paid from funds under the
control of the board as shall be determined by the commission; and provided, further,
that an ex-officio member of a city, town, county, district or authority retirement board
upon the acceptance of the appropriate legislative body shall receive a stipend of not
more than $4, 500 per year in the aggregate for services rendered in the active
administration of the retirement system.
If you have questions or need assistance, please contact this office .
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