PERAC Executive Director & Chairman Bill Keefe called the meeting (remotely via Zoom) to order at 10:39 AM. Mr. Keefe explained that, because the meeting was remote, all motions made during the meeting would be voted on by roll call, and the meeting would be recorded.
Special COLA Commission members in attendance at the Zoom meeting included State Senator Michael Brady, MTRS Executive Director Emerita Erika Glaster, 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: Al DeGirolamo (Sen. Brady’s Ofc.), Brianna Codio, Janey Frank, Karen Cross, Mike Canavan, Nancy McGovern (Mass Retirees), Seth Gittel (PRIM), and Shawn Duhamel (Mass. Retirees).
Minutes Approval
Commission member Frank Valeri motioned to approve the minutes from the May 12, 2025 meeting. Michael Trotsky seconded the motion, and a vote was taken:
Erika Glaster YES, Michael Brady YES, Bill Keefe YES, Kathryn Kougias YES, Amelia Marceau YES, Michael Trotsky YES, Frank Valeri YES. The minutes were adopted.
Motion to Postpone the Adoption of the Guiding Principles
Chairman Bill Keefe suggested postponing the adoption of the guiding principles, noting that two members (Representative Dan Ryan and Doug Howgate) were unexpectedly absent. Since they may not be able to join the meeting, Mr. Keefe suggested tabling the discussion until later in the meeting, if they arrive, or until the next meeting.
Commission member Erika Glaster motioned to postpone the adoption of the Guiding Principle. Frank Valeri Trotsky seconded the motion, and a vote was taken:
Erika Glaster YES, Michael Brady YES, Bill Keefe YES, Kathryn Kougias YES, Amelia Marceau YES, Michael Trotsky YES, Frank Valeri YES. The motion to postpone the adoption of the Guiding Principles was adopted.
Cost Analysis of Enhanced COLA Proposal for Eligible Retirees Presentation
Actuary John Boorack presented a financial analysis of a proposed enhanced cost-of-living adjustment (COLA) for certain retirees in the Massachusetts State and Teachers' Retirement Systems. The study was prepared as an alternative and focused on a one-time cost model.
Key points include:
- The Commonwealth could fully fund this enhanced COLA with a one-time contribution of $145 million, split as follows:
- Approximately $52 million for the State Retirement System.
- Just over $93 million for the Teachers’ Retirement System.
- Eligibility Criteria for the enhanced COLA:
- Retirees must have at least 10 years of service.
- Their annual retirement allowance must be less than 150% of the average retirement allowance in their respective system.
- Retirees must have over 20 years of total service.
- COLA Structure:
- The proposal provides tiered, one-time COLA increases based on years of service.
- Each eligible retiree would receive one COLA bump per 5-year service band, which would become part of their pension base but would not repeat annually.
- Example: A retiree with 10–15 years of service gets a $120 one-time increase.
- Upon reaching 15–20 years, they get an additional $240, and so on.
- These increases are cumulative and permanent (added to the pension base) but not recurring annually for the same tier.
Mr. Boorack opened the discussion for questions, confirming the total projected cost and reiterating that this is a non-recurring expense aimed at bolstering pension fairness for lower-income, long-serving retirees.
Mr. Keefe asked whether the enhanced COLA is a one-time payment for each service tier. Specifically, he asked if a retiree with 11 years of service would receive the COLA increase only once, and not again in their 12th, 13th, or 14th year of retirement. Mr. Boorack confirmed that it was correct.
Mr. Keefe then asked Mr. Valeri whether that’s how he envisioned it.
Mr. Valeri responded “no”. He then explained that the enhanced COLA is structured as one-time increases tied to specific service milestones, rather than annual payments. A retiree would receive a single increase upon reaching the 10–15-year tier, and then another one only after crossing into the next tier (e.g., at 16 years, then again after 20 years), with no repeated payments in the intervening years.
Mr. Boorack clarified that the one-time COLA increases occur at specific milestones—15, 20, and 25 years of service—with a $480 payment applied upon reaching the 25-year mark.
Ms. Glaster sought clarification on whether it would become part of the retiree’s base pension. Mr. Boorack confirmed that, like a regular COLA, each one-time payment does become part of the retiree’s base pension. However, he clarified that the cost estimate was based on a single payment per service tier, not recurring annual increases. If the intent were to give the increase every year within each tier, the cost would be significantly higher—something he can calculate for a future meeting if needed.
Mr. Valeri referenced an earlier analysis from late 2019. He asked whether that cost estimate was also based on the same structure—i.e., one-time payments per service category, rather than recurring annual increases. Mr. Valeri expressed surprise, noting that the one-time payment structure was not previously discussed or clarified in the original analysis, which is why the current explanation was unexpected.
Mr. Boorack was not entirely sure but thought the original 2019 analysis did use one-time payments. He stated he would need to check his notes to confirm.
Mr. Valeri recalled that the earlier cost estimate was higher, likely because the original intent was to provide the COLA as an annual increase, not just a one-time payment. He noted that the current one-time model appears to be low-cost, even with broader eligibility. He then suggested a new cost estimate based on giving the COLA each year within each service tier.
Mr. Keefe suggested that Mr. Boorack create a tool similar to a previous Excel sheet he built—one that allows users to toggle different parameters and quickly see cost impacts based on varying COLA assumptions.
Mr. Valeri agreed with Mr. Keefe's suggestion and asked if John could verify the original assumptions, noting that he didn’t recall it being structured as one-time payments, but acknowledged it was possible.
Mr. Keefe elaborated on the Excel idea, suggesting it would be helpful to have a flexible tool where different COLA scenarios (e.g., changing the 10–15-year tier to a $5 monthly increase) could be adjusted on the Excel sheet, allowing the costs to be viewed as they change.
Mr. Boorack agreed to the request and said that he’ll look into whether creating the adjustable Excel sheet is something he can do easily.
Mr. Keefe then asked if members had additional comments or questions regarding the enhanced COLA proposal or cost analysis.
Mr. Valeri reminded the group that he had previously requested a separate proposal involving the use of pension fund earnings above 9% to gradually increase the base COLA amount (starting at $1,000 annually). The idea was to use excess returns to raise the base incrementally each year until it reached a target level, possibly tied to the Social Security index. He asked whether any analysis has been done on that proposal yet.
Mr. Boorack responded that no additional work or analysis has been done on that proposal since the last meeting.
Mr. Valeri offered to resend the proposal and reiterated the concept: progressively using excess investment earnings to gradually raise the base COLA to a set target level over time.
Mr. Keefe concluded that there are two items to address for the next meeting: the adjustable COLA cost model and the excess earnings proposal. He suggested they also recap prior analyses and begin working toward formulating potential recommendations to move the proposal forward.
Ms. Glaster requested an update on a previously discussed follow-up meeting involving Mr. Valeri, Mr. Keefe, Ms. Marceau, and Mr. Howgate with specific administrative stakeholders, as well as confirmation on whether the meeting has taken place yet.
Mr. Keefe explained that Mr. Valeri and Mr. Howgate were expected to lead the follow-up discussions with key stakeholders, possibly including the House and Senate Ways and Means committees, and the Administration & Finance (A&F) committees. However, he was unsure of the current status.
Mr. Valeri shared that he has recently spoken with Mr. Howgate, and they are now planning to meet with legislative leadership and A&F. The process just began last week. They are in the early stages of organizing the meeting.
Logistical Issues
Mr. Keefe brought up scheduling the next meeting, noting that Monday mornings have generally worked well. He mentioned that July 14th might be a conflict for him and suggested July 21st as an alternative. He asked members to check their availability, acknowledging that it was vacation season and he wanted to be mindful of everyone's schedules. He also mentioned that he would send a survey to finalize the date of the next meeting. The chairman then suggested that if there were no further questions or comments, the meeting would be adjourned.
Ms. Kougias motioned to adjourn the meeting. Senator Brady seconded the motion, and a roll call vote was taken:
Michael Brady YES, Erika Glaster YES, Bill Keefe YES, Kathryn Kougias YES, Amelia Marceau YES, Michael Trotsky YES, Frank Valeri YES. The meeting was adjourned at 10:54 AM.
Special Cost of Living Adjustment (COLA) Commission Meeting Documents
5.12.2025 COLA Commission Meeting Minutes.docx
Actuarial Update COLA Commission 061625.pdf
COLA Commission 6_16_2025 agenda__.docx
COLA Commission DRAFT principles 6-2 edit.docx
Approved,
Bill Keefe, Chairman
| Date published: | August 6, 2025 |
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