Massachusetts legislators in recent weeks have loosened 40-year-old limits on how many hours government retirees can work for a public agency each year while still collecting their taxpayer-funded pension, realizing a change long sought by former employees but derided by critics as too generous.
The House and Senate late last month overrode Governor Charlie Baker in pushing the proposal into law, hiking the cap on retirees from 960 to 1,200 hours per year. With it, the state’s nearly 130,000 retired state employees and teachers — plus thousands more who retired from municipal government — can now work the equivalent of a 23-hour average workweek for a public entity while continuing to earn their pension benefits.
Lawmakers again passed language this month to further enshrine the 25 percent increase into law, including what officials described as a technical fix within an unrelated spending bill that Baker signed Wednesday.
“Some people act like this is a huge give-away to retirees. It’s not,” said state Representative Mark J. Cusack, a Braintree Democrat who sponsored the language. Cusack said it’s up to local officials whether they even want to hire back retirees. “To me, [raising the limit] is a common-sense no-brainer.”
Former workers, through the Retired State, County and Municipal Employees Association, have pushed lawmakers to raise the limits for years, arguing the former threshold limited opportunities for retirees, such as former police officers hoping to work more paid road construction details or a retired educator who wants more hours as a substitute teacher.
Municipal officials, some who’ve juggled a rash of retirements within their aging workforce, have also supported raising the cap because it would give them more flexibility in filling open positions while they seek younger, permanent replacements. Finding qualified workers for specialized municipal jobs has been made even more difficult by a tightening job market, they said.
It was an acute challenge particularly at the height of the COVID-19 pandemic, during which Baker and legislators eliminated the cap retirees face to help local officials keep their town and city governments running.
The waiver, however, was intended to be temporary; it ended in June with the conclusion of Baker’s COVID-19 emergency declaration. The second-term Republican had rejected a similar hike to 1,200 hours a year in 2018 when he vetoed it after the legislative session ended, effectively giving lawmakers little recourse to overturn it.
This year, when lawmakers included it in their annual state budget proposal in July, Baker again sought to stop the provision, arguing a jump of 240 hours a year was a “significant policy change.”
The increase “moves the Commonwealth and its municipalities closer to a place where employees continue to work near full-time while collecting a pension, without any corresponding changes to improve the current practice,” Baker said in a veto letter to lawmakers.
He instead proposed a far-smaller annual increase from 960 hours to 975 and separate language creating a waiver from the cap for those in positions where there’s a “critical shortage.”
The 960-hour cap was first set in 1981, and, officials have said, was intended as a way to curb excessive double-dipping.
“Oftentimes, folks want two bites at the apple,” said Kevin P. Blanchette, a former state representative who now serves as chairman for the Worcester Regional Retirement System’s board of trustees. “If you get into the 20s [as far as work hours], you’re not just talking part time, you’re talking three-quarters time. Then you get the slippery slope of having a bifurcated workforce: You work, you get a pension, and you come right back to work again. It just doesn’t make sense.”
Lawmakers ultimately rejected Baker’s proposal, overriding his veto with unanimous votes at the end of September. Cusack called Baker’s proposed 15-hour increase “insulting” and disputed concerns that the increase inches retirees closer to being able to work full time.
“Arithmetic tells you they’re not working full time,” he said.
Ensuring that retirees stay within their caps falls to the public entities who hire them. Beyond the hours limit, their salary is also limited under another part of the law that legislators did not touch.
Those who are newly retired can earn the difference between the current salary of the position they retired from and their pension, a calculation that can fluctuate from person to person. For example, if the job the person retired from now carries an $80,000 salary, and he or she is collecting a $50,000 annual pension, the retiree is capped at making $30,000 in his or her new part-time public job.
Then, a year from their retirement date, the cap increases by an additional $15,000.
For those in lower-paying part-time jobs, the 960-hour cap could kick in before retirees reach their pay limit. And for older retirees, the rising cost of living, combined with inflation, could make paying bills difficult without another source of income, proponents say.
The average state retiree’s pension is $40,678, while the average retired teacher collects $48,448.
“The idea of not allowing somebody, who is not asking for free money, to be able to work for more income just to pay the bills, it’s outrageous,” said Marilyn Frank, president of the Retired Educators Association of Massachusetts, which lobbied for the change. At 86, Frank, a retired Westford educator, said she continues to work part time in the town clerk’s office, earning about $25,000 a year.
“It’s not a huge amount you’re given, if you jump from 960 to 1,200 hours. But it makes a difference,” she said.
Municipal leaders say lifting the cap could help them, too. In Auburn, town manager Julie Jacobson said in the last three years, the town’s treasurer, assessor, and assistant town accountant alone have retired.
“And that’s just one department,” she said. The town hired back the former treasurer and former assistant temporarily to help bridge the gap while the town sought permanent hires, itself no easy task in the world of municipal finance.
“Not a lot of college students are saying, ‘When I get out, I’m going to become a town accountant,” Jacobson said. “It’s not a matter of, ‘Let’s just wait and find someone who is good.’ You have to have somebody in these positions.”
Local officials say they’re also juggling notoriously tight budgets, meaning any efforts to hire back retired workers are far from largesse.
“When I think about the term double-dipping, it either explicitly or implicitly suggests that there are ill-gotten gains there. If someone is working hours to provide a city or town a service that they need, it feels like fair math to me,” said Adam Chapdelaine, the town manager of Arlington.
“I can’t deny the optics for a second. But if we’re hiring someone on town resources as a retiree, it means we really need them.”
Matt Stout can be reached at email@example.com. Follow him on Twitter @mattpstout.