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State House, Senate compromise in early retirement bill

Facing time pressures to reach a deal on early retirement, Massachusetts House and Senate leaders brokered a compromise late Friday that will allow up to 5,000 employees working in the Baker administration to retire early in an attempt to trim the state's payroll and generate $172 million in budget savings for next year.

The compromise bill, which was negotiated between House Ways and Means chairman Brian Dempsey and Senate Ways and Means chairwoman Karen Spilka, will allow eligible executive branch employees to add up to five years to either their age or years of service to sweeten their pensions if they retire.

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"We believe that it incorporates the best ideas of both bills and look forward to timely action in order to achieve the savings necessary to balance the budget for fiscal year 2016 and allow for a successful early retirement program," Dempsey and Spilka said in a joint statement.

The House and Senate each have two informal sessions planned for next week, and could take up the bill then as long as no lawmakers object in order the speed the proposal to Governor Charlie Baker's desk.

Employees interested in taking advantage of the program would have about a month, from May 11 through June 12, to apply to the Board of Retirement for early retirement under the bill, and the board would be directed to prioritize those who have a longer length of service should the numbers applying reach the state Legislature's cap.

Those using the incentive program would retire effective June 30, the eve of the fiscal year when the payroll savings are expected to help balance the budget. A progress report on the program would be due May 27, under the legislation.

Baker first proposed the early retirement incentive plan as a method for balancing the fiscal 2016 state budget, and said he aims to reduce the state payroll by about 4,500 employees to achieve the desired budget savings.

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House and Senate leaders had been trying unsuccessfully to reach an informal agreement on the bill until Monday when six members from each branch were appointed to a formal conference committee. The conferees included Dempsey, Spilka, Senators James Timilty, a Democrat, and Vinny deMacedo, a Republican, and Representatives James Murphy, a Democrat, and Brad Hill, a Republican.

Though the conference never met, all six lawmakers signed off on the compromise bill before it was filed Friday afternoon, according to aides.

The path to a compromise opened when Spilka and her fellow Senate conferees agreed to lift their proposed cap on the number of employees who could participate in the early retirement program by 500 employees, satisfying the House's desire to give the Baker administration a cushion to achieve the desired savings.

The House did not include a cap in its original bill, while the Senate passed a bill that included a 4,500 employee cap in order to prevent a widespread exodus of employees that some feared would harm services to vulnerable citizens.