House & Senate Negotiate FY21 Budget Differences

$46 Billion Budget Contains State/Teachers’ COLA

NOVEMBER 23, 2020: House and Senate leaders have begun negotiations over the FY21 budgets passed by each branch of the Legislature over the past two weeks. Since the House and Senate passed differing versions of the $46 billion spending plan, a compromise final version has to be negotiated in conference committee before receiving final approval and sent to Governor Charlie Baker for his approval.

Contained within the outside sections of the budget are two items of specific importance to public retirees. First, the budget authorizes the payment of a 3% COLA to State and Teacher retirees retroactive to July 1. The COLA is once again based on the first $13,000 of a retiree’s pension benefit. To be eligible, a state or teacher retiree must have retired before July 1, 2019.

The FY21 COLA has received unanimous support from the Governor, House and Senate. This will mark the 23rd consecutive year where the Commonwealth has approved a COLA for State and Teacher retirees. Under Massachusetts law, each COLA is cumulative and becomes a permanent part of the retiree’s base pension.

A second outside section, approved by both the House and Senate, extends the public retiree work waiver through 2021, as long as Governor Baker’s emergency order remains in place. The waiver, which was created in April in response to the COVID-19 pandemic, allows public retirees to return to active public service in Massachusetts without the hourly or earnings restrictions.

“It appears that the Conference Committee process will last at least a week, which means the final budget will not receive approval and be sent to the Governor until after Thanksgiving or even the first week of December,” explains Association Legislative Liaison Nancy McGovern. “Unfortunately, this means that our State and Teacher retirees will have to wait a little longer for their COLA. At this point, it will likely appear in the December pension check and be retroactive to July 1.”

Please note December 2020 pension payments for state and teacher retirees are scheduled as follows:  Mailing on Tuesday, 12/29/20 and Direct Deposit on Thursday, 12/31/20.

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