Public retirees’ pension delays unacceptable
It’s no coincidence that the No. 1 complaint Mass Retirees President Frank Valeri hears from his new members concerns the lengthy delay in receiving their initial monthly pension check.
Valeri, who said the sizable gaps between a retirement date and a payment date put undue financial strain on new beneficiaries, urged lawmakers Tuesday to adopt reforms that guarantee delivery of at least partial checks by the due date. “These are the things that bother me,” Valeri told the Public Service Committee. “You contribute for your entire career, 9-10% of your gross pay, and at the end of it, you’re having to find a way to retire. That’s not right.”
Valeri isn’t the only high-profile person to highlight this payment backlog.
In January, Auditor Suzanne Bump reported that only about 3% of new retirees receive their first Massachusetts State Retirement Board payment on time. Depending on a retirement’s effective date, the State Retirement Board, which falls under Treasurer Deb Goldberg’s office, is supposed to make the initial benefit payment within 28 to 62 days. Bump’s office found the average span was 115 days.
The auditor’s office and the MSRB both acknowledged “the submission of inaccurate or incomplete information by retirees and state government agencies” as the primary cause of the delays, similar to an issue that befuddled the state’s unemployment insurance claims process during the COVID-19 pandemic.
The MSRB also said that “the retirement of many Human Resource and Payroll personnel across state government during the 2015 Early Retirement Incentive Program” has compounded the problem and further delayed some payments.
Bump’s team of auditors suggested the MSRB send the forms necessary to get the retirees’ most recent pay rate and retirement contribution information earlier than two weeks before retirement, as was the practice during the audit period. The MSRB said it waits until then so that it has the most recent information, which avoids having to make changes after the fact. Bump’s office also pointed out that the MSRB said that “in many instances, multiple salary requests are sent before responses are received, so there can be delays in receiving the necessary information.”
Several bills before the joint legislative panel would require the state to make at least an estimated payment by the first check’s due date if it cannot make the full amount available (H 2748), or pay 90% of the estimated value until extenuating circumstances are resolved (H 2792). The latter bill, filed by Rep. Tommy Vitolo of Brookline, would also require the Retirement Board to submit annual reports to lawmakers about its progress meeting the deadlines.
The retirement funds of state employees, teachers and many municipal employees in Massachusetts are invested through the Pension Reserves Investment Trust Fund.
It appears the blame for these unacceptable payment delays runs through the entire post-employment network, from inaccurate information submitted by retirees to slipshod work by individual municipalities’ human-relations departments, to a potentially overwhelmed and understaffed State Retirement Board.
While these proposed bills offer some help at the margins, they don’t delve into the root of the problem — a cumbersome process complicated by local and state bureaucracies.
We’d ask outgoing Auditor Bump to keep an eye on the efficiencies the MSRB enacted to significantly shorten the payment turnaround time.
Hanging these retirees out to dry with interminable waits for pension checks is no way to thank them for their years of service.