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July COLA Increases In Effect
SEPTEMBER 2016 VOICE: With next year being the 20th year of local COLAs being granted by the regional and municipal board of trustees, all of the state’s 103 local retirement boards, with Leominster being the one regrettable exception, voted for their new pension cost-of-living (COLA) effective this July. The Governor and the Legislature approved the 3% State and Teachers’ COLAs on the $13,000 base.
Only one Board voted for less than the standard 3%, namely the Wellesley Retirement Board that had adopted a $15k base but chose to set the FY17 COLA increase for their retirees at 1.5%, providing retirees a $225 annual increase. Once again, Leominster stands alone as the one and only anti-COLA board.
Over the past six years, 64 local boards have accepted a COLA base greater than $12,000 to which their 3% increase is applied. The State and Teachers’ remain at $13,000, while Bristol, Hampden County and Montague, each at $18,000, top the base list.
Since we last reported on COLA base increases in 2014, eleven systems have increased beyond the 1997 established $12,000 base. The Fairhaven Retirement System is the most recent, with its Board succeeding in raising the base from $12,000 to $13,000 at town meeting.
The remaining 38 boards have voted the standard three-percent on a $12,000 base, a $360 maximum. While many of these remaining boards have significantly increased their asset values since the market crash of 2008 and directed most of the system gains to improve funding status, accommodate funding schedules and institute more conservative assumptions, it has not allowed them to expand plan benefits to accommodate a higher COLA base.