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December 28, 2012

Governor eyes changes to public pension programs

BOSTON — State and municipal employees would have to wait until they are older and put in more years of service to qualify for retirement health benefits under a proposal being embraced by the Patrick administration to cut future benefit costs by $20 billion over the next 30 years.

Gov. Deval Patrick intends to file a retiree health benefit reform plan as part of his fiscal 2014 budget proposal in January that will include the recommendations of a commission that has spent the past nine months reviewing retiree health care costs, said Jay Gonzalez, the governor’s budget chief. He called the plan a “very significant change.”

“In order to present a fair retiree health benefit for employees we need to change the system and the benefit to make it affordable over time and that’s what this reform aims to do,” said Gonzalez, the governor’s secretary of administration and finance.

A commission studying retiree employee health care costs voted 11-1 last week to recommend an increase in the age and years of service required for a state employee to be eligible for health care coverage in retirement.

Shrewsbury Town Manager Dan Morgado, a representative on the commission of the Massachusetts Municipal Association, was the only vote against the recommendations.

The final report adopted by the Commission to Study Retiree Healthcare and Other Non-Pension Benefits recommends increasing the age of eligibility for the majority of state employees in Group 1 from 55 to 60, in line with changes made in 2011 to the state pension system.

The commission also recommended increasing the required years of service in state or municipal government from 10 years to 20 years for an employee to qualify for retirement health benefits. The state currently pays 80 percent of a retiree’s health insurance premiums. Under the new proposal, an employee with 20 years of service would be reimbursed 50 percent of their premiums costs, increasing to 80 percent for those with 30 years of service or more.

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