Committee advances bill to provide post‑retirement COLAs for municipal police and firefighters; amendment to prepay liability fails

The House Local Government Committee voted 16-10 to report House Bill 1289, which would require municipal retirement systems to provide ad hoc cost-of-living adjustments (COLAs) for certain police officers and firefighters who retired on or before Jan. 1, 2016. The bill scales payments by years retired and directs the Commonwealth to reimburse municipalities for a portion of amortized costs from the general fund.

Under the bill text read by committee staff, annuitants retired 10–15 years would receive $250 per month, those retired 15–20 years $375 per month, and those retired 20 or more years $500 per month. If an annuitant is eligible for COLAs from more than one municipal retirement system, the bill would reduce payments so total COLAs do not exceed the stated amounts. The legislation also reduces the adjustment by 65% of any COLA already paid after Jan. 1, 2002 and before December 2025, and it allows municipalities to be reimbursed for portions of COLAs paid from non-state aid municipal revenues.

Sponsor Representative Malagari said the measure is a targeted adjustment for retirees whose fixed pensions have been eroded by inflation and medical costs; he said the cost is finite, transparent, and intended for a one-year implementation that then continues at the adjusted amount for eligible annuitants. He noted prior votes on similar measures and said the Commonwealth would need to appropriate dedicated funds in the 2025-26 budget to reimburse municipalities.

Chairman Miller offered amendment A00509, which would require the General Assembly to appropriate sufficient funds from the general fund to reimburse municipal pension systems for all unfunded liability generated by the COLAs. Miller said prepayment would avoid creating new unfunded liabilities borne by taxpayers and could allow pension funds to invest the upfront payment. Members debated the fiscal approach. The amendment was defeated on a roll call 14-12.

During general debate, opponents including Chairman Miller said the bill as drafted could create significant unfunded actuarial liabilities; Miller cited an earlier IFO estimate that he said showed an unfunded liability of about $342 million under a prior version. Sponsor Malagari reiterated that municipalities would initially pay the benefit and be reimbursed by the Commonwealth after submission to the Auditor General and that appropriation would be addressed in the budget process.

On the final roll call the committee reported the bill 16-10. Members noted an actuarial note will be prepared and that the bill’s fiscal implications will be considered as part of budget deliberations.