Massachusetts Treasurer Timothy Cahill is moving to limit the damage of a November court ruling allowing former University of Massachusetts President William Bulger to enhance his state pension by including the value of job perks.
Fearing the ruling could inflate retirement payments and strain the state pension fund, Cahill said he will file legislation as soon as today barring any compensation other than wages from being used to calculate state workers' retirement benefits.
"We are intending to file some legislation soon that will define regular compensation as strictly salary," said Cahill, whose office oversees the state pension fund.
If passed, it would not affect current state workers, whose benefits would be determined based on the Bulger decision.
Cahill aides were working on the bill yesterday, so not all of the details were available. One other provision would not penalize women who leave their state jobs to have a baby.
Cahill would allow those women, when they return to work, to pay into the pension fund what they would have contributed had they never left.
A Patrick administration spokesman said the governor had not seen the proposed bill and could not say if he would support it.
James Stergios, executive director of the Pioneer Institute, has criticized the state pension system for the myriad of exceptions he says makes the system unfair to state workers and taxpayers. Stergios, who hadn't seen the bill, said Cahill's proposal is a move toward making the system more fair.
"I think this is a great first step," Stergios said. "We hope that there are more reform steps to be taken."
David Holway, president of the National Association of Government Employees, also had not seen the plan. But he's concerned Cahill's proposal excludes benefits on which state workers pay federal tax.
He also said he'd like Cahill's maternity proposal to include men who leave their state jobs for a time to care for their children.
Cahill's proposed legislation has its roots in a November state Supreme Judicial Court ruling that Bulger's retirement pension should be based on his entire compensation package as head of UMass, including a $29,000 housing allowance and $19,000 annuity.
So far, at least nine state officials are asking to have their pensions recalculated to include various job perks. They include two former state college officials and two retired state representatives. One of them, former Rep. Marie Parente, D-Milford, has asked the pension fund to add travel, parking and office expenses to the figure used to calculate her annual pension.
But the state isn't the only place where pensions have been swollen by perks. In the town of Swampscott last summer, the local retirement board voted to let town employees count the personal use of a town-owned vehicle - like a police cruiser - toward their pension. Swampscott's town administrator criticized the policy at the time of the vote:
"It's an unusual step, quite frankly," Andrew Maylor said in July after the retirement board's vote, adding that it "seems to be sort of double-dipping on the community."
The $42 billion state pension fund provides benefits to 176,000 employees and teachers and 96,000 retirees. It is funded through a combination of worker contributions, returns on investments and more than $1 billion in annual payments from the state.
The Bulger ruling would not render the pension incapable of funding those workers' retirements, but it would put a strain on the system, Cahill said, and could delay the fund from meeting its goal of being fully funded by 2023.
"It could have far-reaching impacts and serious financial implications to the pension fund if this ruling the (SJC) made gets applied very broadly," Cahill said.
The Legislature, which would have to pass Cahill's rules change, has been accused of abusing the pension rules. Last year, the Legislature approved an annual benefit of $54,000 for former Rep. J. Michael Ruane, the late Salem Democrat who never contributed to the pension fund.
Rep. Harriett L. Stanley, D-West Newbury, who opposed the Ruane bill, said Cahill's bill doesn't go far enough.
State officials moving to have their benefits beefed up following the Bulger ruling aren't greedy, she said, they're just playing by the rules. It's the rules, Stanley said, that need to be changed.
"It's not just a matter of taking away counting of unusual perks toward a pension," Stanley said. "It's reworking the entire system, and that's a massive job but one that needs to be done."