The 2001 three percent COLA was made possible by the vote of the five-member retirement boards for each of the 104 local retirement systems. These systems encompass all public retirees in the Commonwealth with the exception of the two largest systems, the state and teachers’.

Members will recall, that our Association’s 1997 legislation (Ch. 17) made it possible for local governing bodies to authorize retirement boards to independently vote for annual COLAs based on the consumer price index (CPI) or 3%, whichever was less. Since the CPI, at that time, was running less than 3%, our Association sponsored legislation in 1999 (Ch. 127) which allowed boards the option of voting for a full 3%.

In 1999 and 2000, five boards did not vote for the full 3%, but rather voted for the lesser CPI figures of 1.3% (1999) and 2.4% (2000).

Even though this year’s CPI was 3.4%, the boards were limited – but not required – to vote for 3%. However, despite our criticism of boards which did not previously vote for 3%, we can only praise all boards this year for voting for the full COLA. This unanimous vote came at a time when many local pension funds actually lost money on their investments last year and were facing another down market year in 2001.

Because the FY 2002 state budget (effective July 1, 2001) was not passed in time for eligible state and teacher retirees to receive the new 3% COLA in July, there will be a retroactive COLA payment when the budget is ultimately signed.

There are several areas in the budget on which the House and Senate disagree and until both sides reach final agreement, a budget cannot be passed. As we previously reported, both branches and the Governor have agreed on the 3% COLA; therefore, the new state and teacher COLA is assured.

Passage of the budget will be noted on our 24-hour toll-free recorded hotline and posted on our website.

Members, retired prior to July 1, 2000, are eligible for this year’s COLA. Members, retired prior to July 1, 2001, will be eligible for next year’s COLA.

At the present time, the $12,000 base remains in effect. The 3% is applied to the first $12,000 of any pension, meaning that it will be applied to the entire pension if under $12,000 and to $12,000 of any pension over that amount. Under this formula, the maximum increase is $360 or $30 monthly.

“This is the first time we’ve had unanimous support among all retirement boards,” said Association President Ralph White. “After working so long and hard to win COLA autonomy for local boards – meaning they don’t need approval of the mayor, council, selectmen or town meeting to grant a COLA – it’s disheartening when a board doesn’t use that power.

“One board (Easthampton) did vote 3-2 against a COLA this year, but under pressure from retirees, took a later vote which was 4-1 in favor of the COLA. That gave us a 100% record for this year.

“The Governor, House and Senate all came through on behalf of state and teacher retirees. While this COLA cannot be paid (retroactive) until the FY 2002 budget is passed, our members are accustomed to late budgets and the politics involved in finalizing these budgets. We have no complaints with this annual process.”