Piece Fair But Incomplete Picture
JUNE 18, 2012: Figures don’t tell the full story when pension cost-of-living increases are discussed in the press.
Piece Fair But Incomplete Picture
JUNE 18, 2012: Figures don’t tell the full story when pension cost-of-living increases are discussed in the press.
An article in today’s Boston Globe headlined the Boston Retirement Board’s vote for a $12,000 COLA base increase to $13,000, while City Council President Murphy is pushing for $15,000.
Although the article says a Retirement Board raise will result in an annual increase of $30 and Councilor Murphy’s a $90 increase, neither provides a true picture for the reader of the increase to the average retiree or survivor.
A sub piece in the same article points to Hampden County, which voted for an $18,000 COLA Base last year, enlarging the annual cost-of-living adjustment by $180.00 for retirees of the 18 towns holding membership in the Hampden County Retirement System.
Some prompt research by Julianne Bartley, executive director of the Hampden County Retirement Board, paints a far more accurate picture of what an $18,000 base meant to its retirees and survivors last year.
Although a $12,000 base was increased to $18,000, the average annual pension of these Hampden County retirees was increased by only $315.00, a far cry than the touted $180 plus $360 on a $12,000 base – a total increase of $540.00.
In the Town of Montague, which is more well-known as Turners Falls, one of the Town’s five villages, the Montague Retirement Board also voted for an $18,000 COLA base last year.
Since Montague was the only Board, other than Hampden, to reach that height we checked in with Shari Hildreth, director of the Montague Board. Shari’s rough calculation was an estimated average COLA of $313.00 on an $18,000 base. This again is an indication that a higher COLA base is helpful, but modest on average.
Neither the $180 increase or the $540 total are correct. Both of these figures are the maximum, just as the figures for Boston are the maximum and not the average increase.
Other states, which for the most part have previously applied cost-of-living percentage to full pensions, are now cancelling or delaying COLAs in several instances. This trend should not even be considered in Massachusetts, which has always had a too severely limited COLA base.
“While our retirement boards continue to strive toward more realistic COLA bases, now is not the time to look at national trends, as the Mass. Municipal Association and other fiscal watchdogs would do,” says Association President Ralph White.
“As Jean-Pierre Aubrey of Boston College’s retirement research center and Joe Connarton of the Commonwealth’s PERAC point out, Massachusetts retirees have paid their dues with heavy contribution rates and loss of Social Security benefits. It’s great to have such reputable support,” White added.