The Globe is reporting today on the ability of some local and state employees to gather extra (and earlier) pension benefits by invoking a 1945 state law that gives the richer benefit to twenty year employees who have had their jobs phased out. From the Globe:
The law, passed in 1945, was intended to protect longtime public employees from politically motivated purges, guaranteeing them immediate and significantly higher pensions if their jobs are eliminated or if they are dismissed after at least 20 years on the job. Typically, workers in the state retirement system must wait until they are at least 55 to begin receiving a pension. Unions continue to defend the provision as necessary to help protect workers from being fired or to cushion the blow if they are.
The story highlighted the benefits received by employees of the financially strapped Massachusetts Turnpike Authority.
At the financially troubled Massachusetts Turnpike Authority, for instance, six former employees, including high-level Big Dig managers who were in their 40s and 50s, have taken advantage of the law to reap a combined $3.7 million in pension and lifetime health insurance benefits beyond what they would receive under normal pension rules, an average of more than $610,000 each.
The expenses, calculated by the Globe, were confirmed by the Turnpike Authority, based on state actuarial data on life expectancy and an examination of hundreds of pages of pension records. Many critics, including a few high-ranking state officials, believe that the law that allows for the enhancements should be repealed.
Based on these estimates the Globe has estimated system wide costs.
Extrapolating the costs of the turnpike managers across the entire pool of 386 employees, the state’s tab for all such enhanced pension commitments over the last five years could be as high as $235 million. Using a more conservative estimate, with workers making half as much as the Turnpike Authority officials, the commitment for enhancements over the last five years would be $115 million.
The Globe cited some of the individual cases involved. Here is just one.
Eric J. Waaramaa is among the Turnpike Authority officials who received such enhancements. In a 22-year career with the state and the authority, he worked his way up from planner to the authority’s chief financial officer. But he was terminated last year without explanation, according to a letter dated Jan. 1, 2007, resulting in a $42,036-a-year pension. At the time, Waaramaa was 45 and earning about $105,000 a year. If he had waited till 55, his pension would have been $33,688 a year.
Since then, Waaramaa has worked at the MBTA as deputy director of financial planning, at a salary of $86,142. He picked a 401(a) retirement plan at the MBTA, under which the agency contributes about $6,900 a year toward his retirement.
These stories on some of the abuses of the system are coming when folks are feeling some real pain out there, and quite frankly create a political backlash against all government employees. As we prepare for a referendum on abolishing the state income tax those standing against such a draconian measure should hope that proponents do not have the money to run sixty second ads highlighting some of the things talked about in the Globe today. No real reform could translate into no income tax after November!
Bill Manzi.com 
Your Honor,
I guess this 235 million dollar surprise means the end of “hope” for real estate tax relief.
We certianly have a well managed state, don’t we?
I’m going to bring in a dark felt tip pen and fill in the “yes” box to favor elimination of the state income tax.
I wonder what your political “friends” will say to try to convince me to vote “no”. It should be hilarious.
I have an idea for a follow up partition, “reduce the General court session to every other year and pay a gratuity instead of full salary”. The retrobate crooks won’t run for office again.
The problem is I don’t have confidence in the the results. The electorate in Massachusetts are corrupted by the pandering General Court.
women and children first.
Jules
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Clearly a hot button issue Mr Mayor. It might prompt some explanation of a situation when an employee retires from a job and then is rehired in the same position collecting two checks for what some would say is doing the same job.
Or what about a situation in which a person is paid full time to perform a particular function and then is paid additional money to perform another job during the same time period for which he works. I hear it is called a stipend.
Are there any situations like this in the managment of Methuen’s government? If so what are they and what is the justification for the policy?
Secondly, I might have missed what Sen Baddour and Rep Campbell have been doing in the area of pension reform. Do you have any idea?
Thank you.
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Well lets deal with the two situations you cite, and the implicit criticism you offer. In answer to your first inquiry Methuen’s DPW Director has retired, and draws a pension. He is allowed a certain level of outside income based on existing pension rules. That outside income and work hours are severely limited by law. On that basis we derive a full time DPW Director for the small amount he is paid, and I estimate that we save between sixty and seventy thousand dollars a year. We have saved that amount for about five years, bringing the savings to Methuen taxpayers to about $300,000. Unlike the Globe story our person does not earn retirement and a full time salary, but then again you already knew that.
As far as stipends go we know that you refer to the Water Registrar position. As you already know we have chosen not to fill the position of water registrar, and have issued additional compensation to the Chief Engineer and to the Assistant Engineer to perform that function. The justification is simple. They are doing the work that had been done for years by a separate person, and should be compensated for that work. The water system is running smoothly, and once again the City runs with less personnel, and for the same or less money than we would have paid should we have filled that position. But thank you for asking.
As far as pension reform I believe both supported legislation to give the Treasurer and PRIM additional authority over some local systems. Do you support that legislation? As you are reputed to be running the campaign of Rep Campbell’s opponent don’t you think you should have disclosed that in the post? Or did he deny your support on the Duggan show? I have not been able to listen to that podcast over at http://www.tommyduggan.com . Maybe I should as I understand your name came up during that discussion.
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As usual Bob LeBlanc is trying to cause trouble. Bob your questions were sooooo transparent. What I cannot figure out is why it all of sudden interests you. The DPW Director began his retirement/work arrangement under Mayor Pollard as did the elimination of the water registrar position and the subsequent sharing of the duties associated with it by other workers who were paid additional monies. You never questioned that before. Alas, alack your inquiries are always an attempt to embarass Mayor Manzi. As always his honor can properly respond but you just keep it coming. Oh by the way I did listen to the show. Aty Dibella quite clearly tried to deny any association with you. Why do you think that is?
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Wow, a blog hissyfit.
To add fuel to the fire, the Herald just published some earned wages at the “T” with operators earning in excess of $100,000 dollars. The Herald has been reporting on these hacker issues for some time now. Is there no wonder why the mayor’s friends are nervous about the outcome of the State Income Tax elimination referendum.
Your Honor, will your friends bring to a halt to Hacker-mania, double dipping, nepotism and all the other corrupt practices that burden the taxpayers? Wanna make a bet?
Jules
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I suppose you are looking for another oversized coffee at starbucks?
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Bill,
Why is it that when a citizen asks a question it is “implicit criticism”?
I think that the DiFiore arrangment is good for Methuen as you describe.
I think the disbursement of the Registrar money is not.
You know very well that I am not running Chirs DiBella’s campaign and not part of his strategy group by choice. I support him because I want a Representative like Artie Broadhurst who rose above Methuen’s petty politics of personal destruction of which you are a master.
By the way don’t you think it would be a sign of transparent and honest government if there were another public hearing on the zoning change in September rather than raming it through in the heat of summer?
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No Your Honor, I could not take that much advantage of you. After all you take the loosing side as part of your loyalty to the major party in this state.
I hope those people appreciate what their poor management is costing you.
Jules
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Bob,
It is not necessarily implicit criticism to ask questions. It is implicit criticism when you ask questions that you already know the answer to and try to link those issues to an undesirable state practice. Additionally you deal with the water registrar issue when we have discussed this numerous times, publicly and privately.
Your attempt to leave insinuation and innuendo are hallmarks of the politics of personal destruction.
As far as the Master Plan zoning changes we have had the most open and transparent effort at achieving this that I can recollect in local government. We went through a series of open public dialogues, our visioning sessions, as well as numerous publicized hearings before the Master Plan Committee as well as the Community Development Board. Nobody is ramming anything through. As you may know we have ninety days after the original joint public hearing to vote on this plan. That is state law, counselor. We have stretched the process so that I can meet with neighborhood groups and try to address their concerns. We have done so, and have amended the plan substantially to meet resident concerns. I don’t recall seeing you at ANY of the visioning sessions or public hearings on our proposal. We will meet our statutory requirements here counselor despite your feeble attempts to politicize and cast aspersion on what has been an open, fair, and inclusive process. All the best!
Bill
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Bob,
Notwithstanding your misspelling, I’m trying to get a handle on why you give me the willies when you use expressions like this…
“rather than raming it through in the heat of summer?”
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I agree with Jim on this one. That terminology is deliberatly inflammatory. The process has been a very, very long and fair process. Nothing is being “rammed” through at all. Anyone interested could have attended the many meetings held. I don’t recall seeing Bob LeBlanc at even ONE of those meetings. For some reason Bob uses the Mayor’s own blog to bash him. I am not sure why you allow it Mr. Mayor other than your wish to present open dialogue. Bob you are always soooooooo negative. This process was far more open and transparent than say the tearing down of St. Monica’s church.
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Summer, although I agree with you, I really don’t think that’s what Jim was referring to. Just think about the line a little more…
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Summer Surrogate: I am NOT bashing the Mayor. That is not my intent. I simply am engaging in nopen dialogue reflecting comments I hear every day from citizens.
I agree that the Mayor has lobbied very hard to reach as much accommodation as could be achieved at this point in time. I merely suggest that more time would have resulted in total agreement. Given the fact that a significant neighborhood was not satisifed more work could have been done without jeopardizing the process.
While the statute stipulates action within 90 days of a public hearing, there are many legal means by which that deadline can be extended. There was nothing doomesday or sacred about the date. At worst another public hearing would have been required say in two weeks and then the Council could act in September.
The specific question was asked as to whether any commercial project would be jeopardized by delay and the answer was no. So why not take the time to satisfy the Haverhill St and Broadway neighborhoods?
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The Broadway neighborhood was fully satisfied, and has signed off on the changes. And while Haverhill Street has not signed off the approach taken was markedly different and not likely to result in movement forward. I agreed to recommend a change to the Haverhill Street Plan, which would have benefitted the direct abutter to a parcel recommended for change. Council voted that down. And you are wrong about the time frame and the potential for additional public hearings. You cannot schedule additional public hearings after the public hearing is closed. You CANNOT extend the ninety day time frame without killing the proposal. So you are wrong on the substance. Sorry about that.
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