House Passes Early Retirement Incentive Program; Will Achieve Cost Savings for FY16 Budget

(BOSTON) – Representative David P. Linsky (D-Natick) joined his colleagues in the House of Representatives today to pass legislation that creates an early retirement incentive program (ERIP) for Group 1 employees in the Office of Governor and Executive Branch.

The program was originally proposed as part of Governor Baker’s FY16 budget and was taken up separately so that associated savings can be included in the House’s budget, which will be released next month.

“By keeping the legislation narrow in scope and including a specific provision related to backfilling, this plan will result in significant and timely savings,” said House Speaker Robert A. DeLeo (D-Winthrop). “Massachusetts’s economic wellbeing and competitiveness are a direct result of the state’s fiscal prudence and foresight. I thank the Baker Administration for advancing this proposal and look forward to the important work we have ahead of us as the House drafts its FY16 budget.”

“The early retirement incentive program serves as an important budget solution for fiscal year 2016,” said Representative Brian S. Dempsey (D-Haverhill), Chair of the Joint Committee on Ways and Means. “The savings that this program can generate will help to protect the line items and programs we care about. It was important for the House to act quickly in order to maximize these savings. I believe that this bill is structured correctly, with the appropriate protections in place especially the provisions on the timing of the program and the backfilling of positions, to maximize the potential for a success.”

“The legislation passed today is an important collective effort between the legislature and Governor Baker,” said Representative James Murphy, (D-Weymouth), Chair of the Joint Committee on Public Service. “The early retirement incentive program is an effective and responsible solution which will generate significant savings.”

“This is a common sense solution that will do well to help the financial stability of the Commonwealth” said Representative Linsky. “I am proud that we were able to pass this provision before the budget, which will allow the House to better fund important programs for the upcoming Fiscal Year.”

The program is anticipated to achieve $172.9 million in net savings. The legislation contains numerous provisions that will help ensure the projected savings are realized including a cap on backfilling positions. Spending for backfilled positions is limited to 20 percent of the annualized compensation that would have been paid out over the next two fiscal years for that role. Eligible employees must apply for ERIP no later than July 15, 2015 with an official retirement date of July 31, 2015.

The bill now moves to the Senate for its consideration.

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