In the absence of the Chairperson, PERAC Assistant Deputy Director Patrick M. Charles served as Chair pro tempore. Mr. Charles called the meeting to order remotely via Zoom at 11:02 AM. He explained that Chairman Bill Keefe was unavailable that day and had designated Mr. Charles as the PERAC designee to chair the meeting. Mr. Charles further explained that, because the meeting was held remotely, all motions would be voted on by roll call, and the meeting would be recorded.
Special COLA Commission members in attendance at the Zoom meeting included MTRS Executive Director Emerita Erika Glaster, PERAC Assistant Deputy Director Patrick M. Charles, 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, Representative Dan Ryan, and President of Mass. Retirees Frank Valeri.
PERAC Staff, including First Deputy Executive Director Caroline Carcia, 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: Tobias T. Cowans (Sen. Brady’s Ofc.), Donna LoConte (Sen. Brady’s Ofc.), Janey Frank, Jay McGowan, Tom Bonarrigo, and William Rehrey (Mass. Retirees).
Minutes Approval
Commission member Frank Valeri motioned to approve the minutes from the October 21, 2025, meeting. Emerita Erika Glaster seconded the motion, and a vote was taken:
Erika Glaster YES, Kathryn Kougias YES, Amelia Marceau YES, Dan Ryan YES, Michael Trotsky YES, Frank Valeri YES, Patrick M. Charles YES. The minutes were adopted.
Actuarial Analysis Presentation
Mr. Boorack provided a follow-up presentation to the Commission, building on prior discussions regarding enhanced Cost-of-Living Adjustments (COLA) for retirees. His analysis focused on the financial impact and eligibility counts for two proposed COLA enhancements, targeting retirees with long service and retirement durations.
1. First Proposal – No Benefit Limit
- Eligibility Criteria: Retirees with at least 20 years of service and a minimum of 10 years in retirement, with no benefit threshold.
- Proposed Annual Enhancements:
- $60 for 10–15 years of retirement
- $120 for 15–20 years
- $240 for 20+ years
- Estimated Liability Impact:
- State Retirement System: $212.3 million
- Teachers’ Retirement System: $356.5 million
- Total: $568.8 million
- Amortization: Over 10 years starting January 1, 2025, with a 4% annual increase, resulting in a first-year cost of approximately $69 million.
- Eligible Retirees:
- State: 23,767
- Teachers: 41,942
- Total: 65,709
2. Second Proposal – Increased Benefit Enhancement
- Same Eligibility Group, with higher annual enhancements:
- $100 for 10–15 years of retirement
- $200 for 15–20 years
- $300 for 20+ years
- Estimated Liability Impact:
- State Retirement System: $289.5 million
- Teachers’ Retirement System: $488.2 million
- Total: $777.7 million
- Amortization: Over 10 years starting January 1, 2025, with a 4% annual increase, resulting in a first-year cost of approximately $94.3 million.
- Eligible Retirees:
- State: 23,767
- Teachers: 41,942
- Total: 65,709
Mr. Boorack concluded by noting the key difference between the current and previous analyses: the October proposal applied only to retirees with benefits below 80% of average salary, whereas the current proposals removed that limitation. He provided the counts for these analyses as follows: State: 20,113; Teachers: 35,717; Total: 55,830. He then opened the floor for questions.
Mr. Valeri responded to the demographic figures presented, noting that while the total retiree population discussed in last month’s analysis was approximately 2,000 members, the relevant group for the current proposal is limited to those who have been retired for 10 years or more. He emphasized that the benefit impact—particularly at the 80% eligibility threshold—would apply to a significant portion of retirees within that subset. Mr. Valeri concluded that the proposed enhancement would likely benefit a substantial number of eligible individuals.
Mr. Valeri continued by emphasizing that the retiree figures presented should be viewed in the context of those who fall within the 10-year retirement threshold. He questioned whether the numbers cited represented the total retiree population or specifically those eligible under the proposal, i.e., retirees with 10 or more years of retirement. He sought clarification on whether the comparison was being made between the entire retiree population and the eligible subset, noting that this distinction is critical to understanding the scope and impact of the proposed benefit. Mr. Valeri concluded by asking if his point was clear or potentially confusing.
Mr. Boorack clarified that the figures presented in the current meeting reflect retirees with at least 20 years of active service and a minimum of 10 years in retirement. He noted that this specific group formed the basis of the current analysis. He further explained that the figures provided in the previous month’s proposals applied to retirees whose benefits were below approximately 80% of the average salary.
Ms. Kougias referred to the following item on Mr. Boorack’s presentation sheet, noting that it aligned with the proposal discussed previously. She clarified that the referenced analysis pertained to retirees whose benefits were less than 80% of the average salary.
Mr. Boorack confirmed that the enhanced COLA proposal being discussed corresponds to the content presented at the bottom of page 1 and the top of page 2 of his materials. He added that, similar to the format used in the previous month, the remainder of the exhibit includes all prior analyses that the commission had requested to evaluate cost impacts.
Mr. Valeri inquired whether removing the benefit threshold in the proposal would cause an increased annual cost estimate of approximately $13 million for the $60 benefit enhancement.
Mr. Boorack confirmed that removing the benefit limit increased the annual cost by approximately $15 million. He added that the total liability associated with the proposal increased by about $100 million. He affirmed that the estimate for the $60 benefit enhancement was accurate as previously stated.
Mr. Valeri noted that all of the proposed enhancements discussed appear to be less costly than a full COLA base increase.
Mr. Boorack stated that, based on the prior valuation dated January 1, 2024, the total liability for the Commonwealth was approximately $120 billion. He explained that a $1,000 increase to the COLA base would raise that liability by about $600 million. He noted that many of the cost estimates presented in his current analysis are comparable in scale to this impact, and that the proposed enhancements of $100, $200, and $300 per year would cause a total cost exceeding that of a $1,000 COLA base increase.
Mr. Valeri acknowledged that the most recent analysis pertains to the group receiving benefits without a benefit threshold, as Mr. Boorack had outlined. He agreed that this represents a variation from previous proposals, affirming the distinction in eligibility criteria and supporting the clarification.
Mr. Charles asked if anyone had further questions or comments on the numbers presented.
Ms. Kougias referenced the third item and asked for the population size of retirees with benefits below 80%.
Mr. Boorack stated that the population includes 20,113 retirees in the State Retirement System and 35,717 retirees in the Teachers’ Retirement System, totaling 55,830 retirees combined.
Ms. Kougias requested a comparison to the earlier item, which referenced retirees with no benefit threshold.
Mr. Boorack confirmed that, as of January 1, 2024, there are 23,767 retirees in the State Retirement System and 41,942 retirees in the Teachers’ Retirement System eligible for the top enhancement, totaling 65,709 retirees.
Ms. Glaster asked Mr. Boorack to confirm the date associated with the retiree population figures. Mr. Valeri echoed the request, noting that the next valuation would be based on the same data.
Mr. Boorack explained that all current estimates are based on the January 1, 2024, valuation, as those were the most recent figures available when the analysis began. He noted that this ensures an apples-to-apples comparison across proposals. However, the following funding schedule will be based on the January 1, 2025 Commonwealth valuation, which was presented at the October Commission meeting.
Ms. Kougias said they received the document that week and offered to send it to board members.
Mr. Valeri agreed and noted that the upcoming funding schedule will include earnings and investment gains.
Mr. Boorack confirmed that investment gains will be included as of December 30, 2024.
Mr. Valeri apologized for missing part of the discussion and requested a recap of the demographic figures for the State and teachers' retirement systems, excluding any benefit threshold.
Mr. Boorack reported retirees counts in the State Retirement System (23,767) and Teachers’ Retirement System (41,942), totaling 65,709 retirees.
Discussion followed regarding benefit levels and retiree subsets, with clarification that only those retiring before 2016 (later refined to 2014 cutoff) were included in the analysis.
Ms. Kougias and Mr. Valeri noted differences in retiree counts depending on the cohort definition, with totals ranging from 70,000 to 142,000 across both systems.
Mr. Valeri observed that approximately 3,000 retirees pass away annually, affecting the population under consideration.
Mr. Boorack confirmed that the percentage distribution of retirees is not expected to change significantly year over year.
Working Group Formation and Proposal Planning
Mr. Valeri mentioned that the commission extension had passed the House but was not included in the Senate version and is currently in the conference committee, with the intention of extending it through the end of the year.
Given the complexity and volume of data and options being discussed, Mr. Valeri suggested forming a working group to develop a consensus recommendation. He proposed that the group focus on two key areas:
- The enhanced COLA proposal
- A mechanism to finance a base benefit increase, using a portion of investment excess gains through a formal accounting process.
He recommended that the working group narrow the proposals, circulate a draft recommendation to Commission members ahead of the next meeting, and then present a final proposal for potential action.
Mr. Valeri expressed interest in joining the group. He suggested that Mr. Keefe, Ms. Glaster from the Teachers’ Board, and Mr. Howgate (who had expressed interest earlier) could also contribute. Mr. Valeri also acknowledged Mr. Boorack's valuable analytical support and emphasized the importance of collaboration to reach a workable compromise.
Ms. Kougias expressed support for presenting a proposal to the Commission, provided it is acceptable to all members. She noted that she had also spoken to Mr. Keefe, who would be willing to participate in the working group.
Mr. Valeri acknowledged the busy schedules at the end of the year, including his own involvement in a state board election. Despite this, he expressed willingness to dedicate time to help develop a proposal. He emphasized the importance of coordinating with Mr. Howgate, Mr. Keefe, and Mr. Boorack to initiate the work on the project.
Given the tight timeline and legislative deadlines, Mr. Valeri stated that forming a working group is the most viable path toward producing a recommendation. He noted that any proposal would ultimately need to be presented to the House and Senate and stressed the need to establish a process for developing and refining that recommendation.
Ms. Glaster agreed with Mr. Valeri’s proposal and emphasized the need for a document that Commission members can review and comment on specifically. She noted that the data provided by Mr. Boorack has been helpful and suggested a smaller group could help narrow the options. Keeping the proposals within a defined range would allow for more detailed analysis and progress toward a final recommendation. She expressed her willingness to participate in the effort.
Mr. Valeri expressed his willingness to participate in the working group and invited additional thoughts from Commission members.
Ms. Kougias expressed support for Mr. Valeri’s proposal, emphasizing the need for a clear action step. She said she would do her best to be available and join the working group. She said there appeared to be general agreement among members on the desire to develop and present a recommendation.
Mr. Valeri reiterated the Commission's goal. He emphasized the need for more defined concepts around an enhanced COLA (Cost-of-Living Adjustment) and a mechanism to finance future base increases. He suggested setting aside a portion of excess investment earnings through an accounting process to build funding for future COLA increases.
Mr. Valeri noted that it has been 13 years since the last COLA base adjustment, and inflation has significantly eroded the purchasing power of retirees. He cited rising costs, including Medicare premiums, which have increased from $99 to over $185, and are expected to exceed $200, along with increases in the state supplemental health insurance plan. These costs, he explained, consume the entire $390 monthly net benefit increase, leaving retirees with little to no gain.
Mr. Valeri highlighted that while the average benefit has increased from $26,000 to $28,000 to $42,000 since 2013, retirees are now falling behind due to inflation. He stressed that addressing the COLA base is a necessary cost of doing business and urged the Commission to develop a reasonable recommendation to present to the legislature and administration. He then concluded by acknowledging the urgency of the issue and the importance of taking action to support long-term retirees.
Ms. Kougias noted that Social Security recently issued a cost-of-living adjustment. She remarked that this adjustment aligns with federal government practices and acknowledged the significant uncertainty surrounding the federal budget process.
Mr. Valeri highlighted the disparity between Social Security benefits and the current COLA base. He noted that in 2013, the average Social Security benefit was approximately $13,000 to $14,000, whereas it has now increased to over $23,000. In contrast, the COLA base remains fixed at $13,000, which does not reflect inflationary changes.
Mr. Valeri further explained that while Social Security benefits are tied to the Consumer Price Index (CPI) and adjust with inflation, the state COLA is a flat $390 annual stipend, not linked to inflation. As a result, retirees have fallen behind financially. Mr. Valeri noted that 98% of retirees in the state teacher system remain at the $13,000 base level, emphasizing that the current COLA structure does not accurately reflect a cost-of-living adjustment.
Mr. Valeri then acknowledged the legislature and governors for consistently funding the $390 annual increase, noting that while it is cumulative, it is not compounded. Mr. Valeri stressed the urgency of addressing inflation, which he described as the highest in 40 years, and urged the Commission to make a recommendation. He concluded by stating that adjusting the COLA base should be recognized as a necessary cost for doing business.
Mr. Charles proposed forming a subcommittee of no more than four members to begin drafting proposals for a future report, noting the need to avoid a quorum. He identified Mr. Valeri, Ms. Glaster, Mr. Keefe, and Mr. Howgate as participants and volunteered himself. He asked whether a formal motion was needed to proceed.
Mr. Valeri suggested that the subcommittee could be formed without a formal motion, as long as its creation is documented in the meeting minutes.
Mr. Charles recommended that the subcommittee begin work soon to meet the anticipated December 31 deadline, assuming it will be included in the conference report. He noted that the MACRS conference, scheduled for the week of December 8, would make scheduling difficult, so the week of December 1 would be ideal for presenting initial proposals.
Mr. Charles then suggested the subcommittee aim to produce a draft framework within the next two weeks, allowing time for the full Commission to review and discuss it during the week of November 24, ahead of the holiday break. Mr. Charles emphasized the need to narrow down the information into a range of proposals with cost estimates and justifications, including options for a base benefit increase and potential funding mechanisms using excess investment gains. He concluded that the final decision would ultimately rest with the legislature, which may choose to adopt a combination of the proposed solutions.
Mr. Valeri supported narrowing the existing analyses and developing recommendations through the working group. He agreed with the proposed timeline, suggesting that if the subcommittee could produce a draft before Thanksgiving, the Commission could review it and aim to schedule the next meeting for the first week of December, noting that the MACRS conference would make scheduling the following week difficult.
Logistical Issues
Mr. Charles noted consensus that the working group would meet over the next two weeks to prepare a proposal by the week of November 24 for Commission review. He proposed scheduling a full Commission meeting during the week of December 1 to consider the working group’s recommendations.
Mr. Valeri supported the proposed plan.
Mr. Charles asked if there were any additional topics the Commission members wished to discuss before concluding the meeting.
Ms. Glaster asked who would be responsible for coordinating and scheduling the working group meeting.
Mr. Charles stated that PERAC staff would reach out to the four working group members to coordinate scheduling, consistent with the approach used for the COLA schedule. He then asked if there was any further business and, hearing none, suggested a motion to adjourn.
Commission member Kathryn Kougias motioned to adjourn the meeting. Emerita Erika Glaster seconded the motion, and a vote was taken:
Erika Glaster YES, Kathryn Kougias YES, Amelia Marceau YES, Dan Ryan YES, Michael Trotsky YES, Frank Valeri YES, Patrick M. Charles YES. The meeting was adjourned at 11:38 AM.
Special Cost of Living Adjustment (COLA) Commission Meeting Documents
Actuarial Update COLA Commission 11-6-25.pdf
October 21. 2025 COLA Minutes pmc.docx
COLA Commission 11_6_2025 agenda.pdf
Approved,
Bill Keefe, Chairman
| Date published: | December 16, 2025 |
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