Includes State/Teachers’ 3% COLA & Extends Retiree Work Waiver

December 4, 2020: House and Senate leaders completed work on the $46 billion-dollar FY21 budget with both branches voting on a conference committee report in a rare Friday session. The final version now goes to Governor Baker for approval. The vote today takes us one step closer to ending the 6-month delay of a final FY21 budget.  The Commonwealth has been operating under several interim budgets since the start of the fiscal year in July, while the Governor and Legislative leaders awaited revenue information.

Several key pieces impacting retirees were included in the bill. First the authorization of the 3% State and Teacher Retirees, retroactive to July 1 was included in the outside sections. To be eligible a state or teacher would have had to retire before July 1, 2019. Due to the timing, retirees could see the COLA in their December pension check.  In addition, it fully funds the Group Insurance Commission and the Commonwealth’s pension obligation. Fully funding these items, despite the impact that pandemic has had on the economy, is welcome news as we close out 2020.

Another item of note included in the final version was language that extends the retiree work waiver through 2021, as long as the Governor’s state of emergency is in effect. This language originated with the successful adoption of our amendment to both the House and Senate budgets, sponsored by Rep. Mark Cusack (D-Braintree) and Sen. Brendan Crighton (D-Lynn) respectively.

The waiver, which allows retirees to return to work for the state and local governments without the restriction on hours and earnings, was enacted in April in response to need to fill gaps in critical services due to the pandemic.

It is important to note that the 3% State and Teacher COLA, full funding of the GIC and the pension obligation were included in Governor Baker’s revised budget in October. Also, the special waiver was initiated in April as part of legislation Governor Baker submitted to address the impact of COVID-19. For these reasons, we are not anticipating any changes to these items by the Governor.

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