Three Percent COLA Assured

JULY 2001 - House And Senate In Agreement - Although
it may be some time before the House and Senate reach final agreement
on the Commonwealth’s FY 2002 State Budget, which takes effect this
July, the new 3% COLA for state and teacher retirees has been agreed
upon by both branches and the governor.

In
its budget, which was passed on May 8, the House included a 3% COLA in
its $986 million pension liability fund line item. This was an increase
of $52 million over the governor’s pension line item, which also
included a 3% COLA.

Since the Senate
has included a 3% COLA in its pension line item, the COLA will be in
the final version of its budget which is now being debated in that
branch.

Because the House and
Senate budgets differ in several areas, including funding for the
controversial “clean elections” referendum, it is anticipated that a
House-Senate budget conference committee could go well into the summer
before reaching final agreement.

In
the event that the budget is not passed in time for the July COLA
increase, it would be paid retroactively in a later check. This has
happened in the past and your Association does not consider it to be a
problem.

Meanwhile, we are closely
watching our 104 city, town, county and authority retirement boards who
are voting on a 3% COLA for members of their retirement systems. Under
Chapter 17, our 1998 legislation, each of these boards has full
autonomy on COLAs without requiring local government approval.

At
this juncture, 96 boards have approved a July 3% COLA and most of the
remaining boards are expected to do so prior to July 1. Here is a listing of the boards that have approved the COLA.

Members
must have been on the pension rolls prior to July 1, 2000 to be
eligible for this year’s COLA. Members retired since July 1, 2000 and
prior to July 1, 2001 will be eligible for next year’s COLA.

No Change In Base... Yet

The
$12,000 base is still in effect. Legislation (H335), that would raise
that base to $20,000, continues to be reviewed by the Public Service
Committee. Some data on the cost has been forthcoming from PERAC, the
state’s pension oversight agency.

“The
Committee has been under pressure to hold the line on pension costs,
while at the same time we have been pressuring them to agree on a
higher base,” said Association President Ralph White.

“In
any event, this is a two-year session and whatever the Legislature
finally approves wouldn’t take place before next year. We are not
attempting to increase the percentage (3%) at this time, even though
the consumer price index was 3.4% under Social Security this year. In
‘99 and 2000 our 3% COLA was well ahead of the CPI. If the CPI stays
above 3% we’ll tackle that issue, but since we did agree on three
percent with the Legislature in order to escape from the 1.3% CPI of
‘99, this is not the time to make a move.”

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