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Holyoke council asks staff to analyze cost and eligibility of 'half-pay' pension increases under Sections 90A/90C
Summary
Councilors directed staff and the retirement board to compile an actuarial analysis of possible pension increases under Chapter 43 sections 90A and 90C ("half pay") to estimate how many retirees would be eligible and how much such increases would add to the system's unfunded liability before the council considers any action.
The Holyoke Finance Committee voted Feb. 11 to request an analysis of pension "half-pay" increases under Chapter 43, Sections 90A and 90C and to prepare draft language for a future order or vote. The committee did not approve any benefit changes; members directed staff to obtain data and an actuarial estimate before taking a formal position.
City officials said Section 90A/90C allows eligible retirees (for example, superannuation retirees with sufficient service or accidental disability retirees) to receive pension increases up to half the pay of the current position. PERAC's actuary and local retirement staff warned the committee that any approved increase would raise the retirement system's liability, but the magnitude cannot be determined until the number of eligible retirees and the size of increases are analyzed. "If this were to pass and benefits were to be increased under either section 90A or section 90C, there would be a resulting increase in unfunded liability for the retirement system," John Borak said.
Retirement board chair Cheryl said the board conducts valuations every two years and can request scenarios from the actuary showing options such as extending amortization or adding enhancements; Segal Consulting is the Holyoke board's actuary. Committee members noted the last time a widespread half-pay increase was implemented was in 1988 and that doing so now would require careful actuarial work. The city's retirement staff said the analysis would need to quantify how many retirees meet eligibility criteria (service years, current position comparisons) and estimate the liability change.
Several retirees spoke during public comment, asking for clarity on whether half-pay would be eliminated or funded and expressing concern about benefits they had expected for years. The committee emphasized no changes would occur immediately; it only instructed staff to compile the information needed for an informed decision.
What happens next: Council will file an order directing retirement staff and the actuary to determine eligibility counts and liability estimates; the results will be reported back to the finance committee for a public discussion before any formal action.
