It was the fifth straight banner year for the $30 billion PRIT fund which averaged a 19% annualized earnings over that period. PRIT encompasses the state and teachers' pension fund, as well as the funds of several local retirement systems. Seventy percent of all public pension money in the Commonwealth is invested with PRIT.

Local systems who manage their own pension funds have also done extremely well. For example, not including 1999, for which local data is not yet available, Lowell showed a five-year investment return of 18.02%; Wellesley, 16.38%; Arlington 16.09%; and Malden 15.78%.

PRIT's long-range pension funding schedule anticipates an annual investment return of 8.25%. Most local systems assume a similar figure on their investments. With a few exceptions, all 106 retirement systems in the Commonwealth show double-digit investment returns since the inception of mandatory funding schedules. Three systems are slightly under 10%.

Although Chapter 17, the 1997 COLA reform legislation, said that the Social Security consumer price index (CPI) would be the figure used for Massachusetts' COLAs, we were successful in enacting new legislation late last year (Chapter 127) which allowed the state and teachers' to pay a 3% COLA rather than the scheduled 1.3% CPI increase. Local retirement systems were also included in this legislation and are now in the process of adopting this figure retroactive to July 1999.

"There's no doubt about it, it was the success of our pension fund investments that convinced the Legislature that last year a 3% COLA was a reasonable and prudent figure at the state level," said Association President Ralph White. "And since Chapter 127 gave local systems the same option, they are also sharing their investment success with their retirees."

Gov. Fails to Include COLA in FY2001 Budget

Although Governor Paul Cellucci's budget appropriation for pensions is in line with the Commonwealth's long-range schedule to fully fund our pension system by the year 2018, the Governor again gave short shrift to the needs of the current day retirees. He failed to include language in his budget that would trigger a COLA increase this coming July.

Last year the Governor turned his back on local government retirees by vetoing local retirement system home rule COLA legislation ñ a veto which was quickly rebuked by the Legislature's veto override.

"This year he's turned his back on the state and teacher retirees," said White. "We're depending on the House and Senate leaders to add the necessary COLA language to the budget prior to a final vote of the membership.

"Just as I am confident that local retirement boards, having voted for a 3% COLA for the current fiscal year, will shortly be voting for a new 3% COLA effective this July, I am equally confident that the Legislature will maintain a level playing field for all retirees by providing the same benefit for retired state employees and teachers.