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S 1864

Exempts purchases made by civic associations from sales and compensating use tax

2025 Regular Session Introduced by Jack Martins

Allows former MassDevelopment employees who join a public retirement system to buy up to 5 years of prior MassDevelopment service, paid by the employee, for retirement benefits (li

REFERRED TO BUDGET AND REVENUE
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Bill Summary · S 1864

Summary — S.1864 (Massachusetts): Creditable Service for Former Massachusetts Development Finance Agency Employees

Status: Referred to Budget and Revenue (filed Jan 17, 2025; introduced in the 194th General Court)
Sponsor (in text): Senator Barry R. Finegold

Note on metadata: The bill text provided is a Massachusetts bill titled “An Act relative to the creditable service of former employees of the Massachusetts Development Finance Agency.” Some supplied metadata (alternate title, listed sponsors) appears inconsistent with the bill text; this summary follows the bill text and sponsor shown in the filing.

Purpose / Intent

To allow certain former employees of the Massachusetts Development Finance Agency (established under chapter 23G, “MassDevelopment”) who later become members of a public retirement system under chapter 32 to purchase up to five years of prior MassDevelopment service credit for retirement purposes.

Key Provisions

  • Eligibility: Any former MassDevelopment employee who has since established membership in a chapter 32 retirement system and is currently a member in service of that system.
  • Amount of service credit: Up to 5 years of previous employment with MassDevelopment may be credited.
  • Payment terms:
    • The member must pay into the system’s annuity savings fund either in one lump sum or in installments, under terms set by the appropriate retirement board.
    • The payment equals the amount that would have been withheld as retirement deductions from the employee’s regular compensation for that prior employment (or the most recent portion the employee elects), plus “buyback interest.”
  • Treatment of service: The credited service is treated as if it had been rendered in the governmental unit that employed the person at the time of vesting under chapter 32 and in a position subject to chapter 32.
  • Sunset / repeal:
    • Section 1 (which creates this buyback authority) is repealed by Section 2.
    • The repeal (Section 2) takes effect two years after enactment — i.e., the buyback authority is time-limited (effective from enactment until the repeal becomes effective two years later).

Who Is Affected

  • Directly: Former employees of MassDevelopment who later join a public retirement system under chapter 32 and wish to purchase up to five years of prior service credit.
  • Administration: Public retirement boards and retirement systems (administration of buybacks, setting installment terms, calculating interest).
  • Fiscal: Retirement systems and potentially taxpayers — the immediate buyback payments are made by employees (including interest), but granting additional credited service increases future pension benefit obligations. The bill does not explicitly require employer or actuarial additional contributions beyond the specified employee payments.

Procedural / Timeline Notes

  • The bill creates a limited-time opportunity: purchases must be completed before the automatic repeal takes effect two years after enactment.
  • As filed, the bill was presented in the Senate by Senator Barry R. Finegold and referred to relevant committees (metadata indicates referral to Budget and Revenue).

Potential Implications

  • Allows affected former MassDevelopment employees to make prior service “buybacks,” which can increase their pension benefits if credited.
  • Because payments are limited to employee-equivalent deductions plus interest, the bill may not fully cover the long-term actuarial cost of the added service; retirement systems may experience increased future liabilities unless actuarially offset.
  • Administrative workload for retirement boards to process elections, payments, and service credit calculations during the limited window.

For precise legal effect, implementation details (interest rate, installment schedules), and fiscal impact, consult the bill text, the appropriate public retirement system, and any fiscal notes or actuarial analyses produced by the Legislature.

Compiled from official sources — confirm details with the bill’s official record.

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