MTA members testified in a hearing at the State House in September, urging legislators to approve a larger pension base on which the cost-of-living adjustment is calculated. Since 2012, the base for state pensions has been $13,000. As a result, the 3 percent COLA typically awarded in years of high inflation adds little — $390 a year — to retired educators’ pensions.
As members live longer in retirement, their state pensions can’t keep up with inflation, said MTA President Max Page.
"The promise that the Commonwealth makes is if you serve the public and you serve our students and our schools, then you will be able to retire in dignity after a career of 25 or 30 years," he told legislators. "We’re not honoring that commitment."
President Max Page
The MTA is pushing for legislation that would increase the amount applied to the COLA to $18,000. The bill (H.2812) also would create a mechanism to cap out-of-pocket expenses for public retirees who are not Medicare-eligible. And it would freeze the health insurance premium contribution share for current municipal retirees at the percentage they were paying when the legislation takes effect.
In October, the First Wednesday Retiree Speaker Series featured a panel of retirement legislation experts, including Shawn Duhamel and Frank Valeri, CEO and president, respectively, of the Mass Retirees Association. The challenge for increasing the COLA, Valeri explained, is that the actuarial cost scares off many legislators.
"Our appropriation is over $4 billion and it’s increasing by 8 percent a year," he said. "With that kind of pressure, it’s very difficult to get any administration to increase the cost-of-living benefits."
A nine-member state commission is looking into COLA options and is expected to release proposals in December.
In the Sept. 17 legislative hearing, members described the realities of living on tightened budgets.
Page said that an educator who retires with a $50,000 pension will see that amount eroded by 20 percent in a decade, given inflation. "It’s a great pension system as long as you don’t live too long," he said.
Sheila Hanley, a retired reading teacher who worked in Randolph for 30 years, explained that she and her husband, a retired counselor, worked at a time when their salaries were lower than surrounding towns. Retired for a decade, Hanley said she thinks of how difficult finances must be for retired educators who are older than her.
"Think of those educators who have been out 15, 20, 25 years, and how this has impacted their lives."
For more information on the COLA legislation, please visit massteacher.org/legislation.
