Boston Bucking Trend of Cutting Retiree Pensions

Monday, 18 Jun 2012 10:45 AM

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Boston city officials are bucking a national trend with proposals that would raise rather than cut annual cost-of-living increases for public-employee retirees by as much as $90.
 
Mayor Thomas M. Menino is recommending a $30 increase and City Council President Stephen J. Murphy is pushing a $90 raise, according to the Boston Globe. The two proposals would add $390 to $450 annually to retiree paychecks.
 
The proposals are just the opposite of what’s been happening nationwide in cities and states, where local officials and lawmakers have been freezing — or eliminating in some cases — cost-of-living increases for public employees and trying to figure out ways to reduce the taxpayers’ share of overall pension contributions.
 
Other Massachusetts towns have also gone against their nearby neighbor in Maine, which has frozen cost-of-living adjustments for three years, by approving pension increases.
 
“At first blush, it does look opposite to the trend,’’ Jean-Pierre Aubry, assistant director of state and local research at the Center for Retirement Research at Boston College, told the Globe. “But Massachusetts differs from these other plans.’’
 
Aubry noted, for example, that unlike most public-sector employees nationwide, public workers in Massachusetts are not eligible for Social Security, which increases yearly to adjust for inflation.
 
He also pointed out that Massachusetts has maintained a cap on cost-of-living increases that limits the raise percentage to only the first $12,000 of a pension. That cap has kept the annual pension increases relatively low over the years.
 
Another factor that has helped Massachusetts keep its pension system in check, the Globe reported, is the fact that employees pay more into the system than most other states.
 

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