A state overseer is putting a stop to increased fees the Essex Regional Retirement Board has been charging local towns after it attempted to unilaterally reclassify police and fire dispatchers.
The move would have allowed dispatchers to retire at age 60, five years earlier than most town employees, at greater expense to taxpayers.
That drew the ire of officials across the North Shore, who said they were being charged extra money to fund a change they had never approved.
It also caught the attention of the state's Public Employee Retirement Administration Commission, which oversees public pension systems throughout the state.
Although the retirement board later admitted the change in retirement benefits hadn't actually taken effect — it requires the approval of local towns — it billed the towns for the change anyway.
"We're looking at that as we speak," said Joe Connarton, PERAC's executive director. "We will be changing that."
The additional charge will be removed from fiscal year 2009's appropriations, he said.
Manchester Town Administrator Wayne Melville said local officials knew all along the board didn't have the authority to reclassify dispatchers, but its recent performance "didn't give us 100 percent confidence" it would reverse course.
Middleton Town Administrator Ira Singer said he was pleased to hear the state agency is reversing the retirement board's decision. Even though he said he had been assured the additional charge was minimal, "the point is it's illegal."
A call to the retirement board's CEO, Lilli Gilligan, was not returned.
The embattled board has taken heat over a number of issues recently, from 5.8 percent pay raises for staff this year to record losses on its investments.
The board, which oversees the pensions of employees in 19 towns, including Boxford, Hamilton, Ipswich, Manchester, Middleton, Topsfield and Wenham, saw its investments plummet 33 percent in 2008, the biggest loss of any retirement board in the state.
Moreover, officials say, the board's long-term investment history has been unsatisfactory. Some of them want out.
So far, three local towns — Hamilton, Ipswich and Manchester — have asked the board to transfer their investments to the Pension Reserves Investment Trust, a fund established to invest the assets of the state teachers' and employees' retirement systems. Others, including Wenham and Boxford, are waiting to take action until they have answers to some of their questions.
Elsewhere, Rowley and Salisbury recently asked the board to transfer their investments to the state system.
The retirement board originally gave towns a June 29 deadline to decide whether they want the board to move its investments to the state investment trust. Now that deadline has been lifted and no new one set.
Town administrators and managers, local finance committee members and selectmen met in Ipswich Town Hall two weeks ago to air their complaints and have another strategy session planned for July 7.
Meanwhile, state Sen. Bruce Tarr, R-Gloucester, and state Rep. Brad Hill, R-Ipswich, are organizing a meeting with town officials, representatives of the retirement board and the state retirement commission. Hill said he prefers to have all parties "in the same room, at the same time," rather than dealing with the problem town by town.
Connarton said the only way a town can force the board to redirect its investments is through passage of a home rule petition. Most officials, however, would prefer to see the retirement board continue administering employees' benefits but leave investing to someone else.
The retirement board is one of the last vestiges of county government, which was abolished in 1997 in Middlesex, Berkshire, Essex, Hampden and Worcester counties.
