Massachusetts Cuts Pension, Budget Costs Through Early Retirement

Like many other states, the Bay State faces budget challenges. But among the ways it has sought to ameliorate that, as well as cut the cost of paying pension benefits, is a novel approach — encouraging early retirement of certain state employees.

Specifically, the program was open to employees age 55 or older and who had worked for the state for at least 20 years. It was not open to state employees whose salaries were funded by federal dollars.

To sweeten the deal, the state government can backfill 20% of eligible early retirees’ salaries, The Telegram reports. In addition, eligible employees could add five years to their ages or to their tenure as state employees in order to increase their pensions.

Gov. Charlie Baker (R) expected that 4,500 employees would avail themselves of the option, and the Massachusetts Retirement Board reported that 2,960 had done so by the June 12 deadline, according to The Telegram. However, the office of State Treasurer Deborah B. Goldberg anticipates that the final tally will be lower, since the board could find that some applicants are ineligible and others may renege on their participation.