COLA Base Improvements Main Focus in 2024

It should come as no surprise that the cost-of-living adjustment or “COLA” remains the single most important state and local issue for our Association. In fact, this has been the case for the past 55 years.

The reason why the COLA is universally important to our members is because all public retirees and surviving spouses are equally impacted by the issue. We cannot say the same about any other issue.

As we head into 2024, with just seven months remaining in the Massachusetts legislative session, we’re doubling down on our focus to improve the State and Teacher retirees’ COLA base – as well as continuing to work with the 102 local retirement systems.

While the COLA is historically important, the once in a generation spike in inflation we have felt over the past three years elevates the issue to what we believe is a state of urgency. Public retirees need financial relief. This is an indisputable fact!

At the local level, great progress has been made over the past two years with several local retirement systems having made significant improvements to the COLA base. The most striking example is the Town of Montague, which recently approved a $30,000 base for its municipal retirees. Both Bristol County and the Town of Wellesley have taken similar steps forward by crossing the $20,000 threshold.

However, at the state level the State Retirement System and Teachers’ Retirement System continue to maintain the same COLA base that was established by the legislature in 2012 – a $13,000 base.

After 12 years since the last increase, there is no disputing the need to improve the State and Teacher COLA base. There is also no argument opposing the need to create an additional COLA benefit to help career public employees who have been retired for 15 or more years with modest pension benefits.

The challenge we face is purely financial. There is no getting around the fact that, absent a restructuring of the State and Teacher Pension Funding Schedule, a COLA base increase is very expensive. I would argue that it is expensive – but highly necessary!

In the November edition of The Voice, we made the case for the creation of a new COLA Commission comprised of retirement policy experts. This model worked well in 1996, when the COLA faced another crossroads. The result was the landmark COLA Reform Act, of 1997 – a law that has ensured that nearly all MA public retirees have received an annual COLA for the past 26-years.

For the coming fiscal year (FY25), we are calling on state leaders to enact a two-step approach with the State and Teacher COLA base. First, pass a modest increase in the current base that will provide retirees with immediate relief from inflation. In recent years we have pursued a $3,000 increase in the base, which would increase the amount on which the annual COLA percentage is applied from the current $13,000 to $16,000.

Second, we believe that the creation of a special COLA Commission is needed to devise a new method to continually improve the COLA base going forward. It is unfair that State and Teacher retirees be made to wait 10 or more years for incremental increases in the COLA base. Like the situation we face in 1996, improvements are desperately needed.

Over the coming weeks and months, we will continue to work closely with the Healey Administration and the legislative leadership to make every attempt to bring this needed relief for FY25.

Additionally, we will simultaneously work on other top priorities such as the GIC implementing a Medicare Buy-in plan, increasing the Veterans Bonus, and modernizing the state’s Basic Life Insurance plan – to name just a few top of line issues. You deserve nothing less from us!

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