Systems On Track For July Payment

JULY 1, 2013: The House and Senate approved a full 3% COLA on a $13,000 base for state and teacher retirees effective this July. Eligible retirees and survivors should receive the first payment in the July pension check, which is issued at the end of the month.

Thankfully, with Governor Patrick supporting the 3% COLA in his FY14 budget filed in January, his approval of the increase as part of the budget now on his desk is not in doubt. Patrick received the budget on July 1 and now has until July 11 to take action. The annual budget has an effective date of July 1, which of course marks the start of the 2014 Fiscal Year.

The $34 billion budget package also fully funds state retiree insurance contribution rates, which are set upon the date of one’s retirement. Current rates are 90/10, 85/15 and 80/20. Newly hired state employees now are at a 75/25 split, with those hired prior to July 1, 2004 at an 80/20 split.

In addition, the Legislature approved a provision that sets aside 20% of the state’s 2014 tobacco settlement payment aside in the Healthcare Security Trust, which is designed to help fund retiree health insurance. Last year, 10% of the Tobacco settlement payment was set-aside in the Retiree Healthcare Trust.

At the local level, nearly all local retirement boards have already approved the 2013-2014 COLA and will also include the increase in the July pension check. The local COLA base, which is now set by the retirement board in conjunction with the local legislative body (city council, town meeting, etc), ranges from $12,000 to $18,000 depending on the retirement system.