PERAC Executive Director Bill Keefe called the meeting (remotely via Zoom) to order at 11:06 AM. Mr. Keefe explained that because the meeting was remote all motions made during the meeting would be voted on by roll call, and that the meeting would be recorded. Mr. Keefe confirmed that all members had received the required Open Meeting Law information.
Special COLA commission members in attendance at the Zoom meeting included State Senator Michael Brady, MTRS Executive Director Emerita Erika Glaster, State Representative Ken Gordon, Mass. Taxpayers Foundation President Doug Howgate, PERAC Executive Director Bill Keefe, State Retirement Board Executive Director Kathryn Kougias, Executive Office of Administration and Finance Assistant Budget Director Amelia Marceau, PRIM Executive Director and Chief Investment Officer Michael Trotsky, and President of Mass. Retirees Frank Valeri.
PERAC Staff, including First Deputy Executive Director Caroline Carcia, Assistant Deputy Director Patrick Charles, Actuary John Boorack, and Investment Analyst Anna Huang, were present at the Zoom meeting to provide technical expertise and support to the Commission members.
Other attendees at the Zoom meeting: Tom Bonarrigo (Mass. Retirees), Shawn Duhamel and Nancy McGovern (Mass Retirees), Al DeGirolamo and Donna LoConte (Sen. Brady's Ofc.), Jay Leu (PRIM), Jessica Foley (Rep. Ken Gordon's Ofc.), Mary (no last name), Patrick Brock and Patricia Rutkowski (Hampshire County Retirement Board), Samual Gamer (A&F), Shannon Erickson (PRIM), and Sharon Sullivan.
Election of Chair
After members offered opening statements, State Representative Ken Gordon motioned to appoint Bill Keefe, PERAC's Executive Director, to Chair the Special COLA Commission. Michael Trotsky seconded the motion, and a roll call vote was taken:
Michael Brady YES, Erika Glaster YES, Ken Gordon YES, Doug Howgate YES, Bill Keefe ABSTAIN, Kathryn Kougias YES, Amelia Marceau YES, Michael Trotsky YES, Frank Valeri YES. With a majority of the members present voting in favor of the motion, Bill Keefe was elected as Chairman of the Special COLA Commission.
Logistical Issues
Mr. Keefe suggested adopting a scheduling tool called Doodle to schedule future meetings and proposed an additional meeting on March 10. The legislators recommended avoiding scheduling meetings on Wednesday and Thursday afternoons. Concerns about the statutory Feb. 2 reporting deadline were raised. Rep. Gordon said he will work on filing an extension to Dec. 31. Mr. Valeri expressed a desire for a September report in order to be considered for the next three-year funding schedule. Members discussed the deadline and agreed that rather than possibly needing another extension later, to pursue a Dec. 31 deadline with the goal of producing a report by September.
A draft Commission website was presented which the Commissioners agreed to use. There was also a discussion about a document repository and sharing options. OneDrive was proposed for document access, and participants agreed.
Mr. Howgate suggested that it would be helpful for the team at PERAC to provide information about the pension funding schedule and requirements before making any recommendations. This information would allow the group to understand the impact of the consensus revenue process for the House and Senate, helping to inform their recommendations.
PERAC Actuary John Boorack expressed concern about completing the report with the potential COLA updates on time for the triennial schedule, which is set to be updated in early 2026 based on the January 1, 2025, valuation. Since the Commission's work and potential COLA changes are still unknown, all costs associated with COLA in the 2025 actuarial valuation would be estimates. Mr. Boorack also highlighted given the scale of the state and teachers' valuations, it would take several months to complete the valuation work, so that he wouldn’t recommend delaying the start of the valuation work until after the COLA Commission makes its final recommendations.
Background/History of COLA
Mr. Valeri presented a historical overview of the COLA, highlighting key legislative changes and caps over the years:
- In 1997, the Commonwealth increased the COLA base from $9,000 to $12,000. The State and Teachers’ COLA base has been increased once, in 2013, to $13,000.
- Increasing the COLA base has been a local option since 2010 and the median COLA base is $15,000.
- There were COLAs granted in the 1980s that equal the amount of COLA today, $390.
- From 1999-2012, the COLA was 3% on a $12,000 base. Since, 2103, the COLA has been set at 3%on a $13,000 base except for a one-time 5% COLA due to inflation post-COVID.
- Since 2013, the average state and teachers’ retirement benefit has increased by 17% while the average salary has increased by roughly 36-37% showing that retirement benefits are not keeping pace with inflation.
Members commented after the presentation: Mr. Trotsky pointed out that PRIM investment management costs have been controlled and run at 53 basis points. Mr. Valeri acknowledged the work of PRIM in controlling costs and added while the percentage basis hasn’t changed, the dollar value has and that was what he was referring to.
Discussions took place regarding pension benefit adjustments and the need for analysis of inflation's impact on retirees was emphasized.
Rep. Gordon suggested some questions to consider addressing the COLA base such as “what are the implications of the raise, what does it do to the funds, what does it do with respect to the beneficiaries?”
Mr. Trotsky asked how to apply analytics best to illustrate the impacts of inflation.
Mr. Howgate suggested that future analyses address how will small adjustments to the base amount (e.g., a $500 increase) affect liabilities and retiree outcomes?
Reference Documents / Stabilization Fund Task Force
Mr. Keefe discussed various reference documents that had been distributed that will be posted on the website including valuation reports, a 1997 COLA study, a 2009 Special Pension Commission Report, materials presented by the Teachers’ Retirement Board and spreadsheets with various data points on the state’s 104 retirement boards. He showed a chart displaying the range of COLA bases across the systems from $12,000 to $30,000. The State and Teachers’ systems are two of 17 systems with a $13,000 COLA base, placing them in the bottom 17%. He noted that he has learned the two systems at $12,000 are taking steps to try to increase their base this year.
Mr. Keefe highlighted the creation of a Stabilization Fund Task Force pursuant to Section 5 of Chapter 214 of the Acts of 2024. The Task Force will be examining altering the formula for distribution of excess capital gains, which by statute are currently: 90% to the stabilization fund, 5% to the pension fund, and 5% to OPEB. He noted that the Governor’s FY 26 budget proposes to alter that formula so pensions receive an increased amount, but in balance the dollar amount would be the same as less funds would come from the General Fund. Mr. Keefe asked with this Task Force on the books if this may be something to explore as a revenue source for an increased COLA base. Rep. Gordon said he would inquire as to the Task Force’s status.
The next meeting is scheduled for February 4 at 10:30 AM.
Mr. Howgate moved to adjourn the meeting, Sen. Brady seconded the motion, and a roll call vote was taken:
Michael Brady YES, Erika Glaster (email to vote) YES, Ken Gordon YES, Doug Howgate YES, Bill Keefe YES, Kathryn Kougias YES, Amelia Marceau YES, Michael Trotsky YES, Frank Valeri YES. The meeting was adjourned at 11:57 AM.
Special Cost of Living Adjustment (COLA) Commission Meeting Documents
Special COLA Commission Agenda for the meeting of January 31, 2025
1997 COLA study.pdf
2009 pension commission.pdf
2024 Commonwealth Valuation Report.pdf
2024 State Retirement Board Valuation Report.pdf
2024 Teachers' Retirement Board Valuation Report.pdf
2025 COLA Commission Analysis.AH..xlsx
Board Summary Information for 2025 COLA Commission.xlsx
Cost Analysis of COLA Proposals for General Court 12-9-2019 (1).pdf
MTRS Board 2024 COLA Reform Discussion.pdf
PERAC 2023 annual report.pdf
STRS Ohio Supplemental Benefit and Purchasing Power Protection Presenation.pdf
Approved, Bill Keefe, Chairman
| Date published: | July 21, 2025 |
|---|