PERAC Executive Director & Chairman Bill Keefe called the meeting to order (remotely via Zoom) at 11:05 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, Executive Office of Administration and Finance Assistant Budget Director Amelia Marceau, Representative Dan Ryan, and President of Mass. Retirees Frank Valeri.
PERAC Staff, including First Deputy Executive Director Caroline Carcia, Assistant Deputy Director Patrick Charles, Actuary John Boorack, Compliance Manager John Galvin, System Architect Anthony Tse, 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: William Rehrey (Mass Retirees), Tobias T. Cowans (Sen. Brady’s Ofc.), Nancy McGovern (Mass Retirees), Seth Gitell (PRIM), Shawn Duhamel (Mass. Retirees), Tom Bonarrigo (Mass. Retirees).
Minutes Approval
Commission member Senator Michael Brady motioned to approve the minutes from the September 18, 2025 meeting. Frank Valeri seconded the motion, and a vote was taken:
Michael Brady YES, Erika Glaster YES, Bill Keefe YES, Amelia Marceau YES, Dan Ryan YES, Frank Valeri YES. The minutes were adopted.
Actuarial Analysis Presentation
Actuary John Boorack (PERAC) provided an updated cost analysis for the proposed enhanced COLA.
Summary of COLA Enhancement Cost Scenarios
● Original Estimate (July Meeting)Lump sum cost: $881.5M
● Amortized (10 years, 4% annual increase): $106.8M first payment due 1/1/25
● Delaying 1 year increases the cost by 7% interest
Enhancement Scenarios
1. Enhancement #1: At least 25 years of service, at least 10 years retired
a. Benefits:
i. 10–15 yrs retired: +$120/year
ii. 15–20 yrs: +$240/year
iii. 20–25 yrs: +$360/year
iv. 25+ yrs: +$480/year
b. Cost: State $212.4M, Teachers $526.8M → $739.2M total
c. 10-year amortized cost: $89.6M first year (1/1/25), increasing 4% annually
2. Enhancement #2: At least 25 years of service, at least 15 years retired
a. Benefits:
i. 15–20 yrs: +$120/year
ii. 20–25 yrs: +$240/year
iii. 25+ yrs: +$360/year
b. Cost: State $86.6M, Teachers $257.9M → $344.6M total
c. 10-year amortized cost: $41.8M first year (1/1/25), increasing 4% annually
3. Enhancement #3: At least 25 years of service, at least 15 years retired
a. Benefits:
i. 15–20 yrs: +$120/year
ii. 20+ yrs: +$240/year
b. Cost: State $72.0M, Teachers $212.9M → $284.9M total
c. 10-year amortized cost: $34.5M first year (1/1/25), increasing 4% annually
4. Enhancement #4: At least 30 years of service, at least 10 years retired
a. Benefits:
i. 10–15 yrs retired: +$120/year
ii. 15–20 yrs: +$240/year
iii. 20–25 yrs: +$360/year
iv. 25+ yrs: +$480/year
b. Cost: State $128.2M, Teachers $444.6M → $572.8M total
c. 10-year amortized cost: $69.4 million first year (1/1/25), increasing 4% annually
5. Enhancement #5: At least 30 years of service, at least 15 years retired
a. Benefits:
i. 15–20 yrs: +$120/year
ii. 20–25 yrs: +$240/year
iii. 25+ yrs: +$360/year
b. Cost: State $49.6M, Teachers $219.9M → $269.5M total
c. 10-year amortized cost: $32.7M first year (1/1/25), increasing 4% annually
6. Enhancement #6: At least 30 years of service, at least 15 years retired
a. Benefits:
i. 15–20 yrs: +$120/year
ii. 20+ yrs: +$240/year
b. Cost: State $41.6M, Teachers $182.7M → $224.3M total
c. 10-year amortized cost: $27.2M first year (1/1/25), increasing 4% annually
7. Enhancement #7: At least 20 years of service, at least 15 years retired
a. Benefits:
i. 15–20 yrs retired: +$120/year
ii. 20+ yrs retired: +$240/year
b. Cost: State $126.5M, Teachers $240.9M → $367.4M total
c. 10-year amortized cost: $44.5M first year (1/1/25), increasing 4% annually
Mr. Boorack invited commission members to ask any questions they may have.
Senator Michael Brady requested that the presentation materials be emailed to him so he could print and review them later.
Mr. Boorack confirmed he would send submissions after the meeting.
Mr. Valeri thanked Mr. Boorack for his detailed work and acknowledged the burden of preparing all the numbers. He noted that adjusting the eligibility requirement from 20 years of service to 25 or 30 years clearly reduces costs but also creates differences between the State and Teachers’ retirement systems. Because the Teachers’ system has different demographics, the cost impact is significantly greater for teachers. In contrast, the State plan includes more diverse groups (such as social workers, DYS staff, and mental health workers) who often retire earlier, making higher eligibility thresholds less applicable. He expressed concern about recommending improvements that would disproportionately benefit one system over the other. He suggested that the “sweet spot” might be maintaining eligibility at 20 years of service. He recommended considering income or benefit limits—such as 150% of salary, 150% of the average benefit, or 80% of the average wage—as ways to control costs in an inflation-sensitive manner. He concluded by encouraging other commission members to share their views on what the eligibility criteria and limits should be.
Ms. Glaster highlighted three key eligibility criteria that need to be defined: the minimum years of creditable service, the number of years retired, and the benefit amount. She agreed that 20 years of service is an appropriate threshold. For years retired, she suggested it could start at either 10 or 15, but should not be later than 15, since inflation becomes more impactful over time. Regarding benefit amounts, she recommended setting a limit so that individuals with very high pensions (e.g., over $100,000) would not receive the supplemental COLA. She proposed using 80% of the average active member's salary from the last valuation as a benchmark, noting that this measure avoids the circular logic of basing it on the average pension, which itself is affected by COLAs.
Mr. Valeri commented that these are reasonable standards.
The Chair expressed support for recognizing 20 years of service but agreed with others that a cap of 15 years—and possibly even 10—should be considered. He suggested revisiting data on the average pension versus salary to determine a reasonable salary threshold, perhaps using metrics such as 80% of one or 150% of the other. He believed it made sense to include a threshold in the policy.
Ms. Glaster noted that both systems currently yield similar outcomes, with average salaries around 80, and 80% of that amount equates to roughly 60, making the results effectively the same.
The Chair referenced the July meeting estimate of $880 million, noting it exceeded the cost of a COLA base increase. He emphasized the goal of designing a solution that costs less and targets those who need it most, especially in light of the current fiscal climate. He suggested keeping the total cost below the COLA base increase to ensure broader impact and budgetary responsibility.
Mr. Valeri emphasized that benefit levels directly impact overall cost, referencing the July analysis with a 150% limit. He noted that 10-year retirees significantly increase costs, especially when combined with those retired for 25 years or more. To manage expenses, he proposed reducing the 10-year benefit from $120 to $60, maintaining a $2,000 base. This adjustment would still provide a meaningful COLA base increase to retirees with 10–15 years of service. He also suggested eliminating the category for those retired for over 25 years to further reduce total costs.
Mr. Valeri emphasized the importance of targeting support to those who need it most, particularly retirees who have been out for 10 years or more. He highlighted the impact of inflation over the past five years, noting that these individuals have struggled to make ends meet.
The Chair was uncertain whether the suggestions he was about to propose had already been presented by Mr. Boorack, who might know how much they would save in costs. He suggested considering alternative benefit amounts—$100, $200, and $300 instead of $120, $240, and $360—as a potential way to reduce expenses. He acknowledged uncertainty about the impact and welcomed feedback, presenting the idea for discussion.
The Chair further noted that the proposal should be easy to calculate and likely already modeled. He emphasized that the group is close to a workable solution and, echoing Mr. Valeri, suggested focusing on finding the “sweet spot” for cost and impact.
Mr. Boorack said he would quickly review his previous analyses to see if he had something relevant to the proposal.
Mr. Valeri supported the proposed eligibility criteria—20 years of service, 80% of average salary, or 150% of average pension—as reasonable benchmarks. He stressed that the key issue is identifying who most needs help, particularly those retired for over 10 years and earning slightly above average pension levels, who have been most affected by inflation. He emphasized the importance of cost containment and suggested exploring different benefit levels, noting that using either 80% or the full average salary could broaden eligibility.
Ms. Glaster asked whether the Commission’s goal is to define specific eligibility criteria for a supplemental COLA, regardless of the benefit amounts, which could be adjusted based on budget constraints. She sought confirmation on whether the Commission is comfortable including in its report that individuals with a certain number of service years, retirement duration, and benefit level should qualify for a supplemental COLA.
Mr. Valeri questioned whether the governor would oppose the proposal, suggesting that the administration would likely support it given the significant inflation and the absence of a COLA increase over the past 13 years.
Ms. Marceau acknowledged the significance of the long-standing lack of a COLA increase, especially in light of other statewide collective bargaining gains. While she noted current budget challenges may make long-term, significant investments difficult, she emphasized that the proposal would not be entirely dismissed.
Mr. Valeri emphasized the goal of helping those who need it most, aligning with the intent of enhanced COLA criteria. He requested that Mr. Boorack revisit the July meeting analysis to lower the initial payment amounts to $60, $120, and $240, eliminating the top bracket. He also suggested exploring eligibility based on the average salary or 80% of it to assess the broader impact.
Mr. Boorack confirmed the proposed eligibility criteria: 20 years of active service, at least 10 years of retirement, and a benefit threshold based on 80% of the average salary.
Mr. Valeri confirmed that the benefit amounts would also be reduced as part of the proposal.
Mr. Boorack confirmed the proposed $60 benefit for retirees with 10 to 15 years of service and inquired about the reduction in the overall enhanced COLA.
Mr. Valeri observed that the proposed adjustments would effectively cut the benefit amounts in half, citing figures such as $60, $120, and $240 as examples.
The Chair expressed interest in exploring alternative benefit amounts of $100, $200, and $300 to assess their potential impact.
Mr. Valeri agreed to proceed with a $100 total benefit proposal and acknowledged that it would require additional work from Mr. Boorack.
The Chair stated his intention to pursue both options under consideration.
Mr. Valeri expressed support for revised benefit amounts—$60, $120, and $300—stating that this updated structure is a significant improvement.
Ms. Glaster reminded the group that benefit amounts should be divisible by 12 for monthly distribution purposes.
Mr. Boorack noted that for administrative purposes, the estimate should be calculated using monthly figures, though any rounding would be minimal. He asked whether there were additional requests or if he should proceed with updating the July enhancement using the new parameters.
Mr. Valeri expressed interest in proceeding with the proposed analysis unless others had additional requests.
Ms. Glaster revisited the idea of establishing a COLA Reserve Fund, which would fund excess investment earnings above the assumed rate of return. She suggested allocating a percentage of those earnings to support base increases, such as a $1,000 enhancement, once the reserve reaches a sufficient level. She raised the topic again for further consideration.
Mr. Valeri supported the concept of a COLA Reserve Fund, acknowledging technical concerns about asset classification and suggesting that accumulated funds should be treated as part of the system’s liabilities. He emphasized the importance of determining an annual amount that could eventually fund a base increase upfront, eliminating future liabilities. He also stressed the importance of implementing an enhanced COLA for retirees with at least 10 years of service, acknowledging their longstanding challenges and expressing hope that continued market success could lead to broader improvements for all retirees.
Ms. Glaster noted that if the group agrees to fund COLA base increases from excess investment earnings, they would need to determine an appropriate percentage to allocate to this purpose. She referenced a prior proposal to use the 28% rate tied to member contributions in the annuity fund. Still, she acknowledged that this might be too high and left the final percentage open for discussion.
Mr. Valeri referred to a draft proposal suggesting that a portion of excess investment earnings—based on the 27% proportional contribution of state and teacher members—could fund a COLA reserve. He acknowledged flexibility in the assumed rate of return and proposed allocating 15% to 20% of excess earnings to the reserve.
The Chair suggested revisiting the reserve fund percentage estimates at the next meeting, noting that Mr. Boorack had previously performed calculations.
Logistical Issues
After the discussion, the Chair initiated scheduling for future meetings, mentioning his availability after October 6th and acknowledging the difficulty in finding a date that works for all commission members.
The Chair shared his availability for meetings during the weeks of October 6th, 13th, and 20th, noting a preference to avoid scheduling before the commission meeting on October 8th. He suggested Mondays or Tuesdays, specifically mentioning October 14th and 21st, and asked others to flag any scheduling conflicts they might have.
Some members indicated that Tuesday, the 21st, would work for them.
Reporting Deadline Extension Discussion
Mr. Valeri noted that the reporting deadline is October 15th, which may pose a scheduling conflict.
The Chair expressed concern about meeting the October 15th reporting deadline, noting the lack of a solid proposal and the need for multiple meetings to finalize, vote on, and edit the report. He mentioned that staff had prepared a draft shell to front-load the process, but emphasized the need to be realistic about the timeline.
Mr. Valeri suggested exploring the possibility of extending the reporting deadline.
The Chair mentioned an unexpected travel commitment over the next two weeks, which may affect availability, and indicated plans to follow up soon after.
Mr. Valeri suggested discussing the issue at the next meeting, but emphasized that if it occurs after October 15th, action will need to be taken beforehand.
The Chair said the Commission should still be able to meet.
Mr. Valeri acknowledged that while the group could still meet after the reporting deadline, they would not be able to file the report beyond that date.
Mr. Valeri emphasized that recommendations cannot be made after the reporting deadline, suggesting that any related discussion should occur before the deadline.
The Chair proposed making a motion to pursue an extension of the reporting deadline formally.
Mr. Valeri expressed uncertainty and suggested that the group consider discussing the reporting deadline extension immediately.
Mr. Valeri recommended having the discussion before October 15th if the next meeting is scheduled for the 20th and expressed willingness to continue working into November.
The Chair suggested extending the reporting deadline to December 31st to avoid needing another extension, while acknowledging the possibility of completing the work by the end of October.
Mr. Valeri agreed to the proposal and suggested seeking advice from the senators.
Senator Brady agreed with the proposal, saying it made sense to him.
The Chair suggested making a motion to recommend legislative action to extend the reporting deadline to December 31st.
Motion to Extend Reporting Deadline to December 31, 2025
Commission member, Emerita Erika Glaster, motioned to approve an extension of the reporting deadline to December 31, 2025. Senator Michael Brady seconded the motion, and a vote was taken:
Michael Brady YES, Erika Glaster YES, Bill Keefe YES, Amelia Marceau YES, Dan Ryan YES, Frank Valeri YES. The motion to extend the reporting deadline was adopted.
Mr. Valeri acknowledged that Amelia had previously engaged the governor’s office to initiate the process and questioned whether the group should follow the same approach again.
Ms. Marceau agreed and noted that the FY25 closeout step has already been filed with the legislature, suggesting it may be feasible to add the extension request to that legislative vehicle, which she identified as the fastest available option.
The Chair agreed with the suggestion, noting they had been considering the same approach involving budgets and the legislative process.
Representative Ryan confirmed the possibility of proceeding and sought clarification on whether the proposal would be included in the House bill that advanced to conference the previous day.
Ms. Marceau clarified that the earlier legislative action was related to the health safety net and indicated that a separate closeout step should still be forthcoming.
Representative Ryan confirmed he and the senator would act on the matter.
Ms. Marceau suggested sending an email through official channels as a follow-up.
As the meeting drew to a close, the Chair suggested that a motion to adjourn be made.
Commission member Frank Valeri motioned to adjourn the meeting. Senator Michael Brady seconded the motion, and a vote was taken:
Michael Brady YES, Erika Glaster YES, Bill Keefe YES, Amelia Marceau YES, Dan Ryan YES, Frank Valeri YES. The meeting was adjourned at 11:47 AM.
Special Cost of Living Adjustment (COLA) Commission Meeting Documents
Actuarial Update COLA Commission 9-18-25.pdf
COLA Commission 9_18_2025 agenda__.docx
July 29 COLA Commission Minutes.docx
Approved,
Bill Keefe, Chairman
| Date published: | October 21, 2025 |
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