As we reported earlier, the Governor did not include the necessary triggering language for a new 3% COLA when he released his budget in January. However House leaders added the 3% language to the budget which was scheduled to be debated by that branch the week of April 10.

Senate leaders have also assured our Association that the 3% COLA will be included in their budget, which will be passed sometime in May.

After final budget agreement by both branches, it is expected that the budget will be back on the Governor’s desk for signing well before the start of the July 1 fiscal year.

Assuming that we will be successful in our goal, the new COLA for state and teacher retirees whose pension took effect prior to July 1, 1999 would begin this July. The $12,000 base will not change this year, meaning that the maximum annual increase would be $360.

Once again we are indebted to Chairman of House Ways and Means Paul Haley and Speaker Thomas Finneran on the House side and Ways and Means Chairman Mark Montigny and Senate President Thomas Birmingham on the Senate side.

“The leadership of the House and Senate has again come through on behalf of retirees and survivors,” said Association President Ralph White. “And we must give recognition to the membership of both branches who have delivered strong support when it became apparent that none would be forthcoming from the corner office.”

Both the Governor’s and House budgets include a $1.022 billion appropriation for the Commonwealth’s Pension Liability Fund, an amount sufficient to meet pension funding costs, including a new COLA.

The House also included a provision in the budget’s outside sections which requires an experience study to be conducted of the pension system. This study will look at the fund’s assets, liabilities, and demographics to ensure that proper funding levels are being met.

Under the funding law, the responsibility of setting the system’s actuarial assumptions lies with the House Ways and Means Committee. Both Speaker Finneran and Chairman Haley have taken up an aggressive position in terms of fully funding the system by 2018. The guidelines set by the House establish a dedicated approach to fully funding the system by 2018.

We anticipate the Senate to weigh in with funding language in its budget. Senate budget chief Mark Montigny has become increasingly active in the area of pension oversight and long-range cost projection.