Compliance July 7, 2006

MA Legislative Panel Recommends Pension Fixes

July 7, 2006 (PLANSPONSOR.com) - A pension system reform committee created by the Massachusetts State Legislature is recommending a series of fixes, which include ending the ability of certain state workers to qualify for a richer pension benefit.
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The Blue Ribbon Panel on Massachusetts Public Employees’ Pension Classification System wants to end the practice that involves the ability of certain employees using their political connections to get their state job category reclassified to be eligible for the stepped-up benefits, according to the Boston Globe, citing a copy of the committee’s draft report. The report does not address the overall costs of pension benefits to taxpayers.

“Today the system is perceived as unfair to both public employees and taxpayers because some – particularly those employed by the state with political connections – have the ability to ‘game’ the system,” the panel wrote. The report is scheduled to be released next week.

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The Globe explained that employees are angling to be placed into Group 4 – one of four employee categories – reserved for those in high-risk occupations such as police officers, firefighters and correctional officers. Individuals in Group 4 can retire at age 55 with higher benefit levels, the newspaper said. A second category allows employees to retire at age 60, while a third group must wait until 65.  

“The report clearly states that retirement income should be fair across the board for all employees,” Alan Macdonald, a panel member and executive director of the Massachusetts Business Roundtable, told the newspaper. “Now some people get to take advantage of the system, and some don’t. This is about fairness for the thousands of people who are in the system.”

According to the Globe, the panel’s recommendations include:

  • putting a moratorium on reclassifying workers to higher-paying categories
  • basing employees’ pensions on their average salary over their career, not the highest three years
  • reducing the number of employee categories to encourage more employees to work until they are 65 to collect full pension benefits.

The report was produced as political leaders step up their scrutiny of the state pension system, whose members include more than 300,000 active workers and about 180,000 retirees. Many of the recommendations would affect only new hires, the Globe said.

Compliance July 6, 2006

NH Law Extends Medical Coverage for Ill College Students

July 6, 2006 (PLANSPONSOR.com) - New Hampshire Governor John Lynch signed a bill that allows seriously ill college students to continue to be covered under their parents' health insurance policies if they can not maintain full-time student status.
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Business Insurance reports that the measure allows college students to retain coverage for up to 12 months after they take a medical leave of absence from school. Insurers may require the students’ attending physicians to provide documentation and certification of the medical necessity for the leave of absence.

According to Business Insurance, the law applies only to fully insured policies that commercial insurers and health maintenance organizations offer since state laws that relate to employee benefit plans are preempted by federal law.

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The measure, called “Michelle’s Law” in memory of a Manchester, New Hampshire, college student who continued her studies while battling cancer to maintain health insurance coverage, went into effect late last month.

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