It's time to raise the COLA!

The COLA hasn't changed in 10 years
Right now, the maximum annual COLA that retirees can receive is 3 percent on the first $12,000 of their pensions. That's just $360 a year — or 99¢ a day.

With the rising costs of health care, prescription drugs and property taxes, it's no wonder retirees are falling behind.

It's time to raise the COLA
The MTA is supporting a bill to raise the COLA base to $25,000. This would make Massachusetts' COLA base equal to the Social Security COLA base. Since most public employees don't receive Social Security benefits, that's only fair.

First $12,000 only

In January of each year, an actuary employed by PERAC files a report with the legislature on the computation of any increase in the United States Consumer Price Index and the percentage thereof in the previous year by the Commissioner of Social Security, including a statement that the increase requires a cost of living increase in retirement allowances.

State and Teachers' Retirement System: If the legislature determines that a cost of living increase is required, the legislature then establishes the amount of the increase which cannot exceed 3%.  For members of the State and Teachers' Retirement Systems, this increase is then added to the retirement allowances of those retirees or beneficiaries who were receiving pensions as of June 30 of the preceding fiscal year.  The COLA increases are paid from the investment income account of the State and Teachers' Retirement System. [Note:  The cost-of-living- percentage adjustment  applies only to the first $12,000 of one’s retirement allowance.]

*G.L.c.32, Section 102.

Municipal, County or Other Retirement Systems:  Retirement systems other than the State and Teachers' Systems, must adopt G.L. c.32, Section 103 in order to establish a cost of living adjustment for their members and beneficiaries.  Acceptance of the COLA section by local retirement systems is subject to the approval of the legislative body (city council or town meeting) and cannot be revoked.  Systems accepting section 103 are required to submit funding schedules reflecting the impact of a COLA.  The local systems are provided with the COLA report of PERAC's actuary and if the local retirement board determines that the recommended COLA would “substantially impair the funding schedule of said system, “ it may elect not to pay a COLA.  If the local system adopts the recommended COLA, it applies only to the first $12,000 of one's retirement allowance and is funded from the investment income account of the system.  As with the State and Teachers' System, only those members receiving a retirement allowance as of June 30 of the prior fiscal year will receive a COLA.

Eligibility for COLA: As noted above, retirees must be receiving a retirement allowance on June 30 of the prior fiscal year to be eligible for a COLA.  The fiscal year is from July 1 through June 30.  For example, in order to be eligible for the 2007 COLA, a retiree's retirement date had to be on or be fore June 30, 2006.

The legislature granted a COLA in 2006, but only those retirees whose retirement date was on or before June 30, 2005, were eligible.

A brief COLA history

Just the Facts about COLA

View photos from the successful April 4th Lobby Day

Subscribe to MTA's new COLA E-lert
Active and retired members may subscribe. Be among the first to know the latest developments.

Please send your name, home address,  e-mail address and MTA ID number to Jo Ann Fitzgerald, Retired Members Service Specialist, MTA, 20 Ashburton Place, Boston, MA 02108.  You may also e mail this information to her at jfitzgerald@massteacher.org. (If you are retired, please include the name of your former local or chapter.)

Massachusetts Residents: Send an e-mail now!

If you live outside of Massachusetts, please share the talking points on this page with Massachusetts resident family and friends.

 

Last modified: Tuesday, February 25, 2003