PERAC Memo #33 - 2012: Chapter 32, Section 15(7)
Chapter 32, Section 15(7)
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This memo announces new Chapter 32, §15(7), effective immediately, which bars members from receiving a retirement allowance based on salary intentionally concealed from or misreported to the relevant reporting entity; where such misconduct is found, the allowance must be calculated on the lower of the amount actually reported to that entity or to the board, with excess deductions refunded without interest. Boards should note that PERAC (the Commission) is responsible for making the formal determination of concealment/misreporting via a hearing process, and boards must contact PERAC whenever a retirement application raises concerns about unreported or misreported compensation so that an investigation can be conducted before the allowance is finalized.
Full Text
PERAC Memo # 33 / 2012
M E M O R A N D U M TO: All Retirement Boards FROM: Joseph E. Connarton, Executive Director RE: Chapter 32, Section 15(7)
DATE: April 9, 2012
Governor Patrick has signed into law Chapter 36 of the Acts of 2012, “An Act Making
Appropriations For Fiscal Year 2012 To Provide For Supplementing Certain Existing
Appropriations And For Certain Other Activities And Projects.” Section 9 of that Act
amends Chapter 32, Section 15 by adding a subdivision (7).
Subdivision (7) reads as follows:
“(7) In no event shall any member be entitled to receive a retirement allowance under
sections 1 to 28 inclusive, which is based upon a salary that was intentionally concealed
from or intentionally misreported to the commonwealth or any political subdivision,
district, or authority of the commonwealth as determined by the commission. If a
member intentionally concealed compensation or intentionally misreported compensation
to an entity to which the member was required to report the compensation, even if the
reporting was not required for purposes of calculating the member’s retirement
allowance, the member’s retirement allowance shall be based only upon the regular
compensation actually reported to that entity or the amount reported to the board
whichever is lower. Unless otherwise prohibited by law, such member shall receive a
return of any accumulated total deductions paid on amounts in excess of the
compensation actually reported, but no interest shall be payable on the accumulated
deductions returned to the member.”
Chapter 36 contained an Emergency Preamble making its provisions immediately
effective.
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M E M O R A N D U M - Page Two TO: All Retirement Boards FROM: Joseph E. Connarton, Executive Director RE: Chapter 32, Section 15(7) DATE: April 9, 2012
Certain circumstances may give rise to concerns as to whether or not a violation of this
statute has taken place. In that case an investigation must be conducted in accordance to
subdivision (7) of Section 15 of Chapter 32 to determine whether or not the calculation of
a retirement allowance is impacted by its provisions.
As part of that inquiry information must be sought by the retirement board and/or the
Commission to assess whether a member “intentionally concealed compensation or
intentionally misreported compensation to an entity to which the member was required to
report the compensation”. For example in the case of Housing Authority employees
these entities and their contacts are as follows:
Barbara Fields, Regional Administrator, Region 1 Office of Housing and Urban
Development, the O'Neill Federal Building, 10 Causeway Street, Boston, MA 02222
Gregory Bialecki, Executive Office of Housing and Economic Development, One
Ashburton Place, Room 2101, Boston, MA 02108
The local Housing Authority, and the city or town involved.
The Commission is charged with making a determination in such a matter and has
adopted a process by which the member will be provided with a hearing in the event a
question arises as to compliance with the law.
In the event that a concern arises with respect to a particular retirement application the
retirement board should contact the Commission for assistance in assessing whether or
not further action is necessary.
The Commission understands that this legislation represents an added burden on the
retirement board and staff as we work through recently enacted pension reforms.
Thank you for your cooperation and hopefully, we can work together in order to
smoothly implement this statute.