Also, the premium contribution rates for retirees, who are enrolled in the state’s Group Insurance Commission (GIC) remain unchanged in the governor’s budget. Those, who retired on or before July 1, 1994, would continue to pay 10% of the premium, while those, who retired after that date, would contribute 15%.

If the COLA is contained in the budget’s final version, state employees and teachers, who retired before July 1, 2006 will be eligible. The 3% COLA is currently applied to the first $12,000 of one’s pension, for a maximum increase of $360 or $30 per month.

In his budget, Governor Patrick includes a number of proposals relating to the unfunded liabilities associated with future retiree healthcare costs. In brief, he proposes the creation of a State Retirees Benefits Trust Fund, whose funds would be managed by the PRIM (Pension Reserves Investment Management) Board and used to meet these unfunded liabilities.

Beginning this July, $380.52 million would be deposited into the Trust Fund. There would also be a phase-in deposit of 90% of the funds received by the state under its settlement with the tobacco industry,

In addition, a special study commission, on the state’s liability for paying retiree healthcare and other non-pension benefits, is proposed. This commission would report its findings and recommendations, including any proposed legislation, no later than December 1, 2007.

As the next step in the legislative process, the governor’s budget now goes to the House Ways and Means Committee for its review.