Cola

Key Proposals Highlighted

STATE & TEACHERS’ RETIREMENT SYSTEMS:

Note: The first four of the Association proposals listed below are reflective of the major recommendations by the Special COLA Study Commission.

  • Creates COLA Reserve Fund for future state/teacher COLA benefit payments and liabilities.
  • Requires that ten percent (10%) of PRIT’s Excess Investment Income (Gains) in a Calendar Year be transferred into the COLA Reserve Fund.
  • Triggers an increase in the State/Teachers’ COLA base in $1K increments based upon the funds available in the COLA Reserve Fund.
  • Creates an Additional (Enhanced) Benefit that becomes a permanent part of the pension for certain eligible state and teacher retirees who retired before July 1, 2020 and been retired for at least 10 years. In addition, the state/teacher retiree must have at least 20 years of creditable service and receive a pension less than 80% of the system’s average employee/teacher salary. If the retiree satisfies these conditions, there are three (3) levels of Enhanced Benefit increases based upon the number of years that a retiree has been retired:
    • For 10 or more years, the Enhanced Benefit is $100 annually;
    • For 15 or more years $200 annually; and
    • For 20 or more years $300, annually,
    • With 1/12 of the benefit being added to the monthly pension check
  • Increase the current $13,000 state/teacher COLA Base to $16,000
  • For one-time only, requires that 15% (not 10%) of PRIT’s CY25 Excess Investment Gains be transferred to the COLA Reserve Fund.

LOCAL RETIREMENT SYSTEMS:

Note: In its recommendations, the Special COLA Study did not address local retirement systems since the legislative authority for its study was restricted to the state and teachers’ retirement systems only. That said, Mass Retirees expanded its COLA Reform Initiative to include local retirement systems by way of local option.

  • Elect to Create a COLA Reserve Fund by adopting the enabling legislation that allows local retirement to do so (Local Option).
    If a local system elects to create a COLA Reserve Fund, it is obligated to transfer a 10% minimum of its Excess Investment Income (Gains) into the Fund.
  • Elect to Create an Additional (Enhanced) Benefit by adopting the enabling legislation that allows local retirement to do so (Local Option).
    If a local system elects to create the Enhanced Benefit, it will be subject to same eligibility criteria and additional benefit payments as the state and teachers’ retirement systems.

News

Comments are disabled.