Andover Townsman, Andover, MA


November 21, 2013

COLA increase would have costly impact

Editor, Townsman:

After reading Fred Sunderland Jr.’s My View (”Retirees deserve a cost-of-living boost to pension,” Nov. 7), I felt compelled to respond to some of the information Mr. Sunderland presented and to give some more insight on the matter. His assertion that Andover “must” raise the COLA base and that it is not that expensive is questionable at best when one digs a little deeper and looks at the consequences of initiating this change.

His point about the COLA adjustment on the first $12,000 is a simple truth and so is his claim that COLA adjustments to Social Security benefits are on the entire benefit. He happened to leave out though that the average Social Security benefit is only $1,269 per month, or $15,228 per year, not very far off from the $12,000 base. It should also be known the COLA limit of 3 percent per year is an arbitrary percentage and COLA awards are given simply because the awarding authority can award them, not because the COLA is based on any statistical inflation calculation. For example, most retirement systems have always approved the maximum 3 percent award year over year, irrespective of actual inflation, while since 2009, the COLA provided to Social Security benefits was: 0 percent, 0 percent, 3.6 percent, 1.7 percent and 1.5 percent. So although the COLA base of $12,000 is less than the average Social Security benefit, the rubber stamping of COLA’s above the actual inflation rate has benefitted retirees quite well.

His assertion that Massachusetts public employees cannot collect Social Security benefits is also a bit flawed. If a worker has completed 40 working quarters and paid FICA taxes on the wages, that employee is entitled to a benefit at retirement. However, the benefit can be reduced by the Windfall Elimination Provision enacted in 1983. Such a blanket statement that public employees “cannot” collect Social Security benefits is unjust.

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