by Ken Ardon, Van Pham
Pioneer Institute for Public Policy Research
October 24, 2013
The Massachusetts legislature changed state law governing Cost-of-Living-Adjustments (COLAs) in 2010 and 2011 to allow local retirement boards and governments to increase COLAs. Since then, 46 local retirement boards and the cities and towns they serve have increased them. The convoluted nature of the system makes it difficult to recognize the financial implications of raising the COLA, and some local policy makers may not understand the impact of their actions. While increasing the COLA may or may not be good policy, or fair to retirees and taxpayers, cities and towns should have clear information when they make their decisions. This report describes the somewhat unusual COLA in Massachusetts and explores the justification for and the costs of increasing the COLA. The report also investigates why some local boards have raised the COLA while others have not.