PERAC Memo #23 - 2010: O’Brien v. CRAB & another, 76 Mass. App. Ct. 901 (2010)

O’Brien v. CRAB & another, 76 Mass. App. Ct. 901 (2010)

Summary

PERAC Memorandum #23, 2010 notifies boards that the Appeals Court decision in O'Brien v. CRAB, which held that clothing allowances do not constitute regular compensation for retirement calculation purposes, is now final and may affect treatment of other types of payments previously counted as regular compensation. PERAC's Legislative Sub-Committee is reviewing the decision's broader implications, with further Commission discussion and guidance forthcoming. No immediate action is required of boards at this time, but administrators should await additional PERAC guidance before making changes to how compensation is classified.

Full Text

MEMORANDUM #23, 2010 M E M O R A N D U M TO: All Retirement Boards FROM: Joseph E. Connarton, Executive Director RE: O’Brien v. CRAB & another, 76 Mass. App. Ct. 901 (2010) DATE: May 7, 2010 As you may know, the Court of Appeals decision dealing with regular compensation for purposes of calculating a retirement allowance is final. The decision dealt specifically with clothing allowances, but actually has applicability to a wider range of payments which may have been considered regular compensation in the past. The Commission discussed the impact of this case at its April 28, 2010 meeting, and due to possible legislative action, referred the matter to the Commission’s Legislative Sub-Committee for further review and analysis. The matter will likely be discussed by the Commission at its meeting on May 24, 2010. Further guidance will be forthcoming. If you have questions, please feel free to contact this office.