Holyoke mayor, councilors seek PERAC help to reassess pension funding schedule to ease near-term tax pressure

Mayor Joshua Garcia and members of the Holyoke City Finance Committee asked the Holyoke Retirement Board and the state Public Employee Retirement Administration Commission (PERAC) on Feb. 11 to reevaluate the city's pension funding schedule to reduce sharp year-to-year increases in pension appropriations and explore options for tax relief.

The request, which Councilor Meg McGrath Smith submitted in writing and the chair read into the record, proposes extending the city's amortization timeline so Holyoke would remain actuarially sound while moving the municipal full-funding date from roughly 2032 to a later year (McGrath Smith's notes suggested 2037 as an example) to ease near-term tax pressure. "This responsibility creates a cushion, not knowing that the market can always change and veil volatility is part of the investment," the councilor's statement said, arguing the change could "allow us to decrease the tax levy by a significant amount."

At the meeting the chair moved to accept the mayor's letter and the council approved the motion by voice vote. Mayor Garcia told the committee the city is seeking a reevaluation, not an attempt to avoid obligations: "We're not talking about reducing, in a way where we're trying to steer away from our responsibility to fully fund," he said, adding the review is intended to inform whether the current schedule remains appropriate amid rising fixed costs like health insurance.

John Borak, an actuary for PERAC, told the committee that the retirement board is scheduled for a valuation as of Jan. 1, 2026, and cautioned that state law constrains how quickly the city can reduce its contribution. "The appropriation in any fiscal year cannot be less than the appropriation in the prior fiscal year," Borak said, and he reported the city's FY26 appropriation was $19,900,000 while the schedule then called for $20,700,000 in FY27. Under current law, Borak said, maintaining a $19,900,000 appropriation for FY27 would at most extend the full-funding date to about 2034; extending to 2037 would require legislative action at the state level.

Committee members and retirement board chair Cheryl (identified in the meeting as the retirement board's chair) confirmed the board conducts revaluations every two years and that the next formal valuation and actuarial report are expected in the May'July window. Several councilors requested that once the actuary's study is complete, the retirement board or its actuary present the results publicly before the council so elected officials and residents can assess any options.

The committee voted to table formal action on the mayor's request and to await the retirement board's upcoming valuation and actuarial report; staff and the mayor's office will share the valuation results with the finance chair and the council when available. The council indicated that subsequent steps could include drafting a formal order or, if necessary, seeking legislative relief to achieve a longer amortization period.

What happens next: the retirement board's valuation and actuarial report (expected in the coming months) will determine the funded ratio and any new unfunded actuarial liability; the council will review those results in public session before considering changes to the funding schedule.