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COLA Commission Principles 7-29

The Special COLA Commission
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The Special COLA Commission finds and declares:

  1. The Massachusetts public retirement system is a co-dependent partnership between the citizens of the Commonwealth, their government, public employees and retirement board members to responsibly fund, administer and protect the system.
  2. Massachusetts public pensions do not keep pace with inflation as well as Social Security, particularly in high inflationary periods. Unlike Social Security, Massachusetts public pension COLAs are not provided on the full benefit, but a portion of the benefit known as the COLA base. Also, unlike Social Security, the statutory maximum rate of a COLA is 3%. In the case of the State and Teachers’ Retirement Systems, which have a COLA base of $13,000, this means the maximum COLA is $390, unchanged since 2013.
  3. The State and Teachers’ COLA bases have been increased once in 28 years and place them in the bottom 20% of the state’s 104 public retirement systems. One system has a lower base, 15 systems have the same and 86 systems have a higher base. The State and Teachers’ COLA bases can only be increased by an Act of the Legislature whereas the other 102 retirement boards can increase their COLA base with approval of the local legislative body.
  4. The longer one is retired, the greater the impact of inflation and the greater reduction in buying power of the pension.
  5. State and local retirees in Massachusetts spur economic output, generating $1.35 in economic activity for each $1 paid out in public pension benefits.[1]
  6. To increase COLAs to deflect inflationary impact is a desired and just course of action, but one that must be done in a fiscally responsible way for taxpayers, government and the health of the system and in a fair and equitable manner for retirees.
  7. Responsibly using a share of significant investment gains to fund increased COLAs would have the least impact on the general fund, state budget and retirement system and would generally cover the cost.


[1] Pensionomics 2025: Measuring the Economic Impact of DB Pension Expenditures; National Institute on Retirement Security. https://www.nirsonline.org/wp-content/uploads/2024/12/NIRS-Pensionomics-2025_MA.pdf Retrieved Feb. 26, 2025

Date published: August 6, 2025

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