Abuse-of-power cases upset Mass. pension system

Associated Press: March 9, 2009

BOSTON - James Marzilli abandoned his duties as a state senator and left the Statehouse after he was arrested last June on charges of trying to grope four women in broad daylight while visiting suburban Lowell on official business.

Still, the embarrassment didn't keep Marzilli from trying to make his resignation effective Jan. 6, which would have allowed him to qualify for an extra year in his state pension because he technically held the post a few days in 2009.

That plan backfired when he was forced from office in November, when colleagues learned he had represented the Senate on a speaking panel in Germany. But he still wasn't through.

He has asked the state to double his pension, citing a clause in public employee retirement law allowing for enhanced pensions of longtime lawmakers who lose re-election.

Quirks such as those -- and an economic crisis that has left the state with a $1.1 billion budget deficit this year and $3.5 billion in anticipated cuts to start its next fiscal year -- have prompted the state's governor and House speaker to vow that Massachusetts will reform its pension system this year.

"People are outraged when anybody cheats," said Barbara Anderson, executive director of the Massachusetts-based Citizens for Limited Taxation. "It's adding insult to injury when public employees are getting things the average citizen can't even hope for."

Marzilli isn't alone.

* Jeffrey Simon, tapped by Gov. Deval Patrick to oversee state spending of federal stimulus money, more than doubled his annual pension for prior state service by seeking credit for five years on a school committee board when he hadn't paid into the retirement system.

Simon has collected more than $400,000 in enhanced pension payments under the same provision Marzilli is attempting to use, which includes a clause for state employees with more than 20 years' experience who are fired, resign, or lose re-election. The purpose of the provision is to protect state workers whose jobs are "politically sensitive positions."

* John Brennan, a 16-year senator, worked as a volunteer local library trustee for 19 years and got that time as credit toward doubling his state pension, even as he missed 30 out of 36 meetings during his last four years on the board.

* Retired Senate president and former UMass president William Bulger -- brother of the FBI's most wanted mobster Whitey Bulger -- got his yearly $29,000 housing allowance to count as compensation, raising his annual pension from $179,000 to $196,000. Bulger has the highest state pension in Massachusetts.

Bulger's lawyer, Thomas Kiley, said the court simply decided what was "obvious" -- the definition of regular compensation includes contracted-for payments beyond salary.

Marzilli's lawyer, Terrence Kennedy, also said his client is seeking what he is entitled to by law. The state retirement board has postponed a decision until Marzilli's criminal case is resolved.

"It's what he worked for for 24 years, which isn't much money," Kennedy said. "Don't blame him because the law is what it is."

Messages left at Simon's and Brennan's homes seeking comment were not immediately returned.

Gov. Deval Patrick said this week that pension reform, in the wake of abuses and the state's fiscal crisis, is essential.

"It's the outliers -- that year and a day stuff, the 23-years-and-out rule at the T -- that just makes the public mad as heck," Patrick said, referring to the provision Marzilli hopes to use and a perk in the Massachusetts Bay Transportation Authority pension system that gives all employees a full pension after 23 years of service.

Patrick proposed eliminating the MBTA perk as part of his transportation reform package. He has also said he supports the overall structure of the state's benefit system, but says rules must be tightened to eliminate abuses and remove benefits for a select few.

Keith Brainard, research director of the National Association of State Retirement Administrators, said a typical pension model is that an employee must work a certain number of hours a year to qualify for a pension raise. In most other state systems, Brainard said, Massachusetts' policies would never work.

Still, Brainard pointed out that Massachusetts isn't the only state with pension abuses. New Jersey had similar problems with people sitting on state consumer affairs boards -- meeting as infrequently as once a month -- to pad their pensions, and New York Attorney General Andrew Cuomo is investigating whether political consultants used their connections to guide state pension business to their financial firms.

Rep. Jay Kaufman, a Lexington Democrat who chaired a temporary committee on pension reform, said public outrage over high-profile cases and declines in private pensions may make comprehensive change more viable, even though the average state pension is $23,000 with no Social Security benefits.

House Speaker Robert DeLeo said he plans to address pension reform alongside ethics reform in the coming weeks.

"We have to regain the public trust, and I think the way we regain that is through addressing those two issues," DeLeo said. "It's important that we do something, and we do something as quickly as we can."