SWAMPSCOTT — The Select Board voted down the Retirement Board’s proposed 2% cost-of-living adjustment (COLA) for retirees’ pensions out of concern that the approximately $860,000 one-time charge would place a financial burden on the town Monday night.
The proposal would have added a 2% increase to the board’s previously-approved 3% COLA for fiscal year 2023, adding roughly 70 cents each day to the retirement benefits of public servants including police officers, firefighters, and teachers’ aides.
The Finance Committee “leaned toward” opposing the increase after meeting with the Retirement Board last week, out of concern that the town would not be able to cover the $860,000 expense.
Select Board member MaryEllen Fletcher said she had trouble adding to the town’s current $150 million in unfunded liability for retirement benefits, especially for a one-time pension increase that would only benefit retirees with up to a few hundred dollars individually each year. She suggested allocating American Rescue Plan Act (ARPA) funding instead.
“I am very conservative when it comes to finances. So I really feel the best way to handle this is to do a means test and look for the amount of citizens who actually work for the town between 20 and 30 years who make less than, say, between $25,000 and $30,000, and then do an allocation from our ARPA funds,” Fletcher said.
Select Board member Peter Spellios echoed Fletcher’s concerns about the increase’s potential financial burden, adding that the town’s liability is left over from generations of Select Board members throughout the years who neglected to fund it.
Town Administrator Sean Fitzgerald added that while he would like to fund the COLA, the town has to fund a number of additional services such as retiree healthcare.
“If we could make a lot of these decisions and we could not hear a can kicking down the road, sure, we would add 2% on top of a 3% during these inflationary times for every town employee. That would be a good thing, but unfortunately, we don’t just have COLAs,” Fitzgerald said. “We have some of the most generous healthcare programs that you could find in a public or private program, and those costs have gone up by over 20% over the last four years.”
Doug Thompson was the only Select Board member who spoke in support of the total 5% COLA, saying he believed the costs were worth it to fund public servants, many of whom have an annual pension of $14,000 that is below the poverty line.
“We’re not just talking about a number that’s eight years in the future. We’re talking about the people that have served the Town of Swampscott for the last 10, 20, 30, 40 years. They likely reduced their salaries to work here compared to what they could have gotten in the private sector. They literally helped build this town,” Thompson said. “For us to sit here and say that we can’t afford it with all the other things that we seem to be able to afford, it’s hard for me to comprehend.”
Before the Select Board took a vote, Retirement Board Vice Chair John Behen argued that by voting against the COLA, the Select Board would be missing out on potential public employees who might find work in the more than 60% of eligible communities in the Commonwealth that implemented a 5% COLA.
“People come to this town for the services. They come here for the people. You have people produce the services. They’re a human resource, and I’ve got to tell you, people aren’t coming in, they’re leaving. I hear it, I see it … and that’s a huge problem,” Behen said.
