Legislature Approves FY20 Budget; Includes 3% State & Teacher COLA

Legislature Approves FY20 Budget; Includes 3% State & Teacher COLA

To Be Paid in August and Retroactive To July 1

JULY 23, 2019: State & Teacher retirees are set to receive their 21st consecutive annual COLA. On Monday, the legislature approved the $43.1 billion Fiscal Year 2020 budget, which contains the 3% COLA on a $13,000 base.

Since the budget will not be approved by Governor Charlie Baker by the end of July, the new COLA payment will be included in the August check – retroactive to July 1. Members of local and district retirement systems will begin to receive their FY20 COLA in July. The annual COLA for local and district retirees is determined and approved by the respective retirement board and is not part of the Commonwealth’s annual budget process.

The state’s FY20 budget also fully funds the Group Insurance Commission and expands the state’s ban on balance billing across all GIC insurance plans. This ban only applies to medical services performed within Massachusetts, as the Commonwealth does not have legal authority to ban the practice in other states.

Mass Retirees is now working to develop a proposal that would expand COLA benefits for long-term retirees.

“The longer someone has been retired the harder it becomes to keep pace with inflation. Unfortunately, there will always be limits placed on the traditional COLA due to the funding requirements of our public retirement systems. We believe that the COLA can be enhanced for long-term retirees, while still working within the pension funding schedule,” explains Association President Frank Valeri. “Cost analysis needs to be performed using different variations of the concept that we’ve been working on for the past several months. But the basic idea is to find a way to provide a greater COLA benefit for career public employees, who retired years ago with modest pension benefits.”

Association officials hope to unveil the proposal this fall, with the goal of passing the plan within the FY21 budget.

For more information on the FY20 budget compromise, click here.