Members willrecall that our Association's legislation, which was enacted in Section 51 of Chapter 127, Acts of '99 (FY 2000 state budget) last November, allowed local retirement boards to retroactively increase the 1999 1.3% Consumer Price Index (CPI) COLA, paid earlier, to a full 3%. It also allowed the boards to increase this July's 2.4% CPI COLA to 3%.

During this last winter and spring all retirement boards received approval from their local governing bodies, (city councils, town meetings, etc.) to vote to pay these new higher COLAs.

Our Association's earlier sponsored law, Chapter 17, Acts of 1997, accepted by all local retirement systems and their governing bodies, allowed local boards to vote a CPI COLA each year. Acceptance of Chapter 17 required these systems to provide enough money in their long-range funding schedules for annual 3% COLAs in the event that the CPI would rise to that level. In other words, even though the CPI did not reach 3% in July of 1999 or July of 2000, retirement boards could safely vote for 3% without asking for an appropriation increase.

Sad to say that although all 104 of these five-member local boards had the opportunity to pay 3% COLAs for both 1999 and 2000, five failed to do so for either both or one of the two years.

Stoneham Most Egregious

The most egregious of these boards was the Stoneham Retirement Board, which failed to take a vote on either the 1999 or 2000 increase. The two elected members of the Stoneham Board, Bill Abbott and Jim McDermott, both retirees, say they would have voted for the increases, but "the necessary three votes were not there." Stoneham, ironically, recently voted to join the Commonwealth's PRIT fund, meaning that the board is eligible to receive a windfall of about $500,000 from the state each year.

Winchester, an affluent community, must be taken to task for failing to vote for a retroactive 1999 3% COLA, even though the Winchester Retirement Board had received permission to do so by a Town Meeting vote.

The Board's vote was 4-1 against increasing the 1.3% CPI COLA to 3%. The one favorable vote was by elected member Bill Duran, Jr., a firefighter. Bill O'Neill, a retired police officer, voted against the increase. The Board did vote a 3% COLA for this July.

Al Faggiano, a retired Winchester comptroller and ex officio member of the Winchester Retirement Board, is furious about the Board's vote. "I'm both furious and shocked by the vote of our retirement board," said Faggiano. "They (Winchester) have plenty of money and when Town Meeting voted to accept Section 51 this spring the message was that its OK for the Board to vote for 3%. I'm disgusted."

Chelsea is another board that failed to vote for a 3% COLA for 1999. Board members said that the city recently emerged from receivership after a near-bankruptcy and "could not afford the increase." However, in earlier accepting Chapter 17, the retirement system's funding schedule had used a 3% assumption, meaning that a favorable vote would not have resulted in an unscheduled appropriation. Chelsea did vote to increase this July's COLA to 3%.

Two Western Mass retirement boards, Easthampton and Adams voted to pay a 3% COLA for 1999, but also voted to stay with a 2.4% CPI COLA this July rather than go to 3%

"I'm especially disturbed about Stoneham," said Association President Ralph White. "We worked very hard to get our members, including state and teacher retirees, to attend Town Meeting and win the approval vote. For the Board to turn around and not even take a vote so that their retirees could be present to see how they voted is unconscionable.

"Winchester must also be taken to task. We put a full court press on to convince Town Meeting to earlier accept Chapter 17 and a new funding schedule. Ken Duffy (a firefighter who recently died of cancer), an elected board member at the time, was the leading organizer of the Town Meeting vote. I don't know how an elected member, especially a retiree, (Bill O'Neil) could vote to stay with a 1.3% COLA."

White said that he doesn't enjoy putting the knock on local retirement boards. "These are people I know personally and it's tough to be critical," he said. "But our Association plays hardball politics on Beacon Hill on behalf of local retirees. We fight hard to gain these very reasonable benefits and we have no choice but to be critical when a local board fails the retirees. When a 3% COLA is lost for one year, it's lost forever."

"We're looking at a CPI that is up 3.2% through this June and should be above that figure for the twelve-month period ending September 30 by which next year's COLA payment will be measured. Because we're currently locked into a 3% maximum COLA percentage, it was vital that boards pay that amount in 1999 and 2000 to make up for 2001 when the CPI will be above 3%."

White went on to praise the local boards in general: "Despite the few losses, the overwhelming number of retirement board members around the state did an excellent job of both winning the necessary governmental approval to vote for higher COLAs and then going ahead and taking the actual vote. Also, the united support that all retirees - state, teacher, local - provided in the cites, towns and counties played a large role in gaining approval by the governing bodies."