House Ways And Means Increases Pension Appropriation

MAY 2001 -
Three Percent State, Teacher COLA Included - House Ways and Means Committee Chairman, John Rogers has increased the
state’s appropriation to the Commonwealth’s pension liability fund by
$52 million in the FY2002 House Budget.

meetings between House Speaker Thomas Finneran, Treasurer Shannon
O’Brien and House Ways and Means Chairman John Rogers resulted in
Governor Paul Cellucci’s FY2002 budget’s pension fund appropriation of
$934 million being increased to $986 million.

Governor’s appropriation was well short of meeting the state’s
long-range funding schedule,” said O’Brien. “Speaker Finneran has taken
a deep personal interest in the long-term stability of our pension
system. His input was crucial...”

were later informed by the Cellucci-Swift administration that the $934
million in the Governor’s budget was not a firm figure but was based on
an option of three varying funding schedules, and that the
administration wants to work “cooperatively” with the Legislature. The
Governor’s Office of Administration and Finance said that they were in
agreement with a revised appropriation.

Ways and Means budget, which will be voted on by the House by the end
of April, will contain a $986 million pension liability line item.
Included in this appropriation is the language which will trigger a new
3% pension COLA for state and teacher retirees beginning this July. The
Governor’s budget also included the same COLA language.

House passage, the budget will then go to the Senate where that branch
will offer their version. While there will be some differences in the
House and Senate budgets, which will be worked out in a conference
committee, we have been assured by Senate Ways and Means Committee
Chairman Mark Montigny and Senate President Tom Birmingham that the
COLA will remain intact.

as of April 1, 54 retirement boards had voted to also pay a new 3% COLA
this July. Members will recall that it was our Association’s 1997
landmark legislation (Ch. 17) that allows local retirement boards to
vote each year on a 3% COLA for their respective retirees and
survivors. Prior to Chapter 17, with the state picking up the cost of
local COLAs since 1980’s PROP 2 1/2, there had only been three COLAs
for state, teacher and local retirees over the previous nine years.

We do anticipate that all local retirement boards will vote for the new COLA prior to this July. Please see Pg. 19 for a listing of those boards that have voted as of April 1.