After disgraced former state senator Jim Marzilli recently sought a special state pension, the Boston Globe ran a follow-up story reporting that more than a dozen former lawmakers have taken advantage of a law that provides for generous early retirement benefits to lawmakers who retire or lose reelection.
The pension perk may finally now get some attention from the Legislature, where a bill is being filed to strip lawmakers of the benefit, but the reform looks like a half-measure, at best, since it leaves the highly questionable pension benefit in place for all other public employees. In 2002, CommonWealth documented not only cases of former legislators who took advantage of the law, but also high-level political appointees who were benefiting from something originally designed to protect low-level state workers, and hundreds of other questionable cases of workers dipping into the lucrative law, which provides payments of one-third of their regular annual salaries.
The obscure pension provision allows state employees with at least 20 years of service who are fired or who have their jobs eliminated to begin drawing a state pension prior to age 55, the age at which public workers become eligible for regular retirement benefits. The law includes special language for lawmakers, making them eligible for early pensions should they fail “of nomination or re-election,” essentially creating a hardship pension for those who give up their seat or are tossed out of office by voters.
Photo of Jim Marzilli by Frank Curran
State officials say the law was intended to protect career civil servants who lost jobs with the change of administrations on Beacon Hill. But a 2002 CommonWealth review of more than 1,000 early termination pension granted since 1990 raised questions about the propriety of hundreds of the retirement claims. In one-third of the 1,100 cases, the employee had passed the 20-year mark (qualifying them for the early pension) by less than a year. In 10 percent of the cases, workers cashed in within one month of their 20th anniversary in state government. The timing of the cases raised questions as to whether the workers had truly lost their jobs or were instead gaming the system, with the cooperation of supervisors who happened to determine that a worker should be let go (or a job should be eliminated) just as the employee reached the magic 20-year mark.
In some cases, the story pointed out, the political connections of those claiming termination pensions raised a red flag. For example, in 1996, during the Weld administration, Susan Costello, then a 42-year-old assistant secretary in the Executive Office of Health and Human Services, claimed a termination pension based on a letter telling her that her “function has been eliminated.” Costello, a rising Republican activist, had accrued 20 years and two days of state service. She left state government and joined the lobbying firm headed by Weld’s ex-chief secretary, John Moffitt, while starting to collect a state pension of $28,814 a year. She stands to draw about $350,000 in pension payments before reaching age 55.
The law has also been used by several former lawmakers who used their political connections to secure high-paying state jobs and then cashed in for early pensions when their political patrons moved on. Robert Durand, a former state senator who was appointed secretary of environmental affairs by his good friend Paul Cellucci, was replaced by incoming Gov. Mitt Romney in 2003. Durand, then 50, applied for and began receiving a state pension of $43,229 per year.
“If the original rationale, to the extent there was one, was to protect lower-level career employees from the vagaries of politics, it’s now become a rich subsidy for high-level political figures,” said Michael Widmer, president of the Massachusetts Taxpayers Foundation, in a 2004 CommonWealth follow-up story.
The state treasurer’s office oversees the state retirement board. Following CommonWealth‘s original 2002 story, then-treasurer Shannon O’Brien vowed to form a commission to consider a complete overhaul of so-called “termination pensions,” but she never formed such a panel. Her successor, Tim Cahill, said in 2004 that he would tackle needed reforms. “We’re not going to accept that this is the way things are done because that’s the way they’ve always been done,” he told CommonWealth. But Cahill, too, has balked at pushing any legislation to change in the pension perk.
A bill being filed this week by state Rep. Linda Forry, the House vice chair of the Public Service Committee, would do away with the pension benefit for legislators who leave or are voted out of office. But the legislation otherwise leaves the termination pension intact. That means, even if the bill becomes law, the “rich subsidy” would still be available to cabinet secretaries and other high-level political appointees, who often leave office and cash-in on the visibility they enjoyed by landing lucrative private-sector positions, a clear perversion of the law’s intent to protect lower level public employees from changing political winds.
Even the rationale for protecting lower-level public employees with a retirement benefit that can begin while they are still in their early 40s ought to be questioned in an era when no one in the private sector enjoys such benefits. A commission authorized last year by the Legislature is supposed to propose reforms to state public pension laws. But despite a mandate to begin meeting by September, Sunday’s Globe article said the commision has yet to convene and the governor has not even appointed any members.
With the state budget facing some $1 billion in painful cuts, failure to take on the termination pension issue in a wholesale fashion is just one of many reasons for taxpayers to be cynical about any claims from state leaders that they are first rooting out waste and abuse wherever it occurs.
