STATE & TEACHER COLA BACK TO GOVERNOR

Legislature Re Approves $16,000 Base

August 1, 2008: In the final hours of the formal 2007-2008 Legislative Session, the House and Senate re approved a new $16,000 COLA base for retired state employees and teachers, including those teachers who are members of the Boston Retirement System. H4959 is now once again before Governor Deval Patrick awaiting his approval. Association officials anticipate that the governor will approve the measure within the coming ten days, which will then take effect retroactively to July 1, 2008.

As members are aware, Governor Patrick rejected the COLA base increase that was contained within the FY09 State Budget, returning the language to the Legislature with a counter proposal limiting the new $16,000 base to those retired state employees and teachers with pensions less than $40,000. Retirees with pension $40,000 and above will receive the 3% COLA based on $12,000.
Faced with the threat of a gubernatorial veto or the proposal being stalled before the Legislature as the session ended on July 31, Association officials accepted a compromise whereby the new $16,000 base would be means tested only in fiscal year 2009, with the tiered structure automatically sunsetting in July 2009. Under this proposal, all state and teacher retirees will be eligible for the $16,000 COLA base next year, without any means testing applied.
“This is a tough pill for us to swallow, there is no question about that. We have always fought for all retirees to be treated equally,” said Association President Ralph White. “However, faced with the likelihood of loosing this benefit entirely and knowing that it would then take years to get back to this point, we had to make the best deal possible for our members as a whole.
“Everyone deserves a COLA, but the fact is that we have many members living on very small pensions, we’re talking under $16,000 a year, and these folks are barely able to get by. An additional $10 a month may not seem like much, but for these members, it is significant. And with the means test expiring after one year, we took the best deal we could get under the circumstances.”

Local COLA Breakthrough: Essex Regional

Members should also note that local retirees are not included in the COLA base increase at this time. While a local option provision was passed by the Senate in May, Legislative leaders, who heeded to the highly exaggerated concerns of municipal officials, opted not to include local retirees in the FY09 conference committee report.  Instead, a special 15-member commission has been established to complete an in-depth study of the pension benefits and report of funding options for the local COLA. The Association, which is the only retiree/employee organization granted a seat on the commission, will play an key role in the study.
In late a development that brings hope to the plight of local retirees, Governor Patrick has signed a new law that allows the Essex Regional Retirement System to increase the COLA base, for members of its system, to $14,000. The new law, which must now receive local approval by the member units of the retirement system, also allows Essex Regional to annually increase the COLA base in $1,000 increments with further local approval.
The law, which currently only applies to the Essex Regional Retirement System, was first introduced by Board Chairman Timothy Bassett in 2004. It was subsequently vetoed by former Governor Mitt Romney in 2006, before being refiled and passed during the current session. Association officials view this break-through legislation as a significant step toward all local retirees receiving a higher COLA base within the coming year.
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