News Summary
Retired municipal employees in Boston are advocating for an increase in annual cost of living adjustments (COLA) for their pensions. The Boston Retirement Board previously rejected a proposal backed by Mayor Michelle Wu to raise COLA from $450 to $540. Advocates argue that the current amount is insufficient given the rising cost of living in Boston. The proposed increase would require nearly $32 million from the city budget. While Councilors express support for retirees, Wu emphasizes fiscal responsibility in managing the city’s finances amidst economic uncertainty.
Boston – Retired municipal employees in Boston are urging the Boston Retirement Board to increase annual cost of living adjustments (COLA) for pensioners. This initiative comes after the board rejected a similar proposal last year, one that was recommended by Mayor Michelle Wu. The need for a COLA increase has been a longstanding request from retirees, who argue that their current pension adjustments are inadequate in the face of rising living costs, particularly for housing, groceries, and transportation.
At present, retirees receive a fixed COLA of $450 annually. Advocates are lobbying for an increase of $90, which would raise the annual adjustment to $540. Proponents assert that this additional increment would make a noticeable difference for retirees grappling with the high cost of living in Boston, especially considering the recent surge in inflation that has impacted many households across the city.
Mayor Wu has expressed concerns regarding the current economic climate, arguing that the performance of the city’s pension fund investments is uncertain. She maintains that increasing the COLA now would be fiscally irresponsible. The proposed increase would demand nearly $32 million from the budget in the upcoming fiscal year, a significant sum that Wu believes could threaten the city’s efforts to manage long-term debt responsibly.
The Boston Retirement Board has heard presentations from labor union officials and city council members advocating for the COLA increase. Councilors Ed Flynn and Gigi Coletta Zapata emphasized their support for the retirees, noting that they “deserve” the proposed increase in recognition of their years of service to the city.
The debate over the COLA increase highlights a broader issue of fiscal responsibility. The Wu administration argues that while the needs of retirees are important, the city must exercise cautious financial management. Currently, the base amount used for calculating the COLA is $15,000, as set by state law, permitting a maximum annual increase of 3% based on that base. This calculation stems from an adjustment made in 2021, which raised the COLA base from $14,000. The effect of that change has led to a total increase in COLA for retirees of just $90 over the past twelve years, rising from $360 to the present $450.
Advocates for the retirees argue that the present pension adjustments do not adequately respond to the challenges they face, leading many retirees to make tough decisions regarding essential expenditures. While the city has seen three COLA base adjustments since 2010, those increases have not kept pace with inflation, resulting in an insufficient boost to retirees’ income.
In addition to the current initiatives, there are proposals to further increase the COLA base to $18,000. Such a change would bolster annual COLA payments if the full permissible 3% were applied, presenting a more sustainable approach to pension adjustments in the long run. Although Mayor Wu had shown support for these changes during her 2021 campaign, her current focus has shifted to fiscal sustainability, leading to caution regarding any COLA increases.
Looking ahead, Wu hopes for a time when the economy stabilizes, which would allow for further discussions about necessary adjustments to pension provisions. Despite the recent rejection of the COLA increase proposal, the retirement community in Boston remains optimistic about their chances for future progress.
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Additional Resources
- Boston Globe: Retired City Employees Pensions Cost of Living Increase
- Boston Herald: Boston City Council OKs Disability Pension Hike
- Mass Retirees: Proud to Endorse Sean Kelly for Boston Retirement Board
- Wikipedia: Cost of Living
- Boston Globe: COLA Base Increase Retired Boston Employees
- Google Search: Boston pensions
