Retirement Insights
Across the country, AFSCME retirees fight for pension adjustments.
WASHINGTON, D.C.
For AFSCME retirees, a COLA isn’t a soft drink: It’s bread and butter.
"Without a COLA — a regular cost-of-living adjustment — my pension is gradually losing value," says Gary Tavormina, president of New York Retiree Chapter 82. "Inflation just eats up my buying power. It’s like getting my pension cut every year."
Tavormina is one of New York’s biggest advocates for a permanent COLA for beneficiaries of the state retirement system. He knows that AFSCME has waged COLA campaigns all around the country and won victories in places like Rhode Island, Hawaii, Minnesota and Ohio.
"Why can’t a big state like New York give a COLA to its retirees?" he asks. "Our retirement system is 100 percent funded and earning a 25 percent annual return on investments."
Chapter 82 is preparing for the union’s statewide lobby day this spring, where all AFSCME members — working and retired — plan to fight for a pension COLA.
Charles Peritore, chair of New York’s Civil Service Employees Association/AFSCME Retiree Chapter 1000, says they’ll be pushing for a COLA that meets specific standards: "It must be paid automatically — on an annual basis; it must maintain retirees’ purchasing power; and it must be protected by the state constitution."
SHARING THE GAIN. Pension COLAs come in all shapes and sizes. In Washington state, for example, AFSCME Retiree Chapter 10 is pursuing a concept known as "gainsharing." A bill recently passed by the legislature would mean a pension increase every second year, if average interest earned by the state retirement system exceeds 10 percent annually. Retirees in the system’s Plan 1 would receive 50 percent of the excess earnings. The other half would go toward reducing the system’s unfunded liability.
In the last fiscal year, the pension plan’s return on investment was 20 percent. These extraordinary earnings are currently being used to diminish employer contributions to the pension plan, with the proceeds diverted to the general state fund.
"I think they forget that the money in the fund is our money," says Gloria Champeaux, president of Washington Retiree Chapter 10, "and this includes the interest on earnings. It should not be used for the general fund. While we support the gainsharing bill, we’d prefer to see all the excess earnings go directly to the retirees."
ONE MORE HOOP. "City workers get their COLA raise every year," says Houston Retiree Chapter 1550 Pres. Willie Richards, "but the last time retirees of the Hospital District got their pensions raised was in 1994." As a result, Richards and other retiree leaders got together last fall with the leadership of AFSCME Local 1550 and convinced the Hospital District’s Board of Managers that retirees deserve an adjustment to their pension checks.
AFSCME’s negotiations won the board’s approval for a 2.5 percent increase. One hurdle remains before retirees can take it to the bank: the final okay from the Harris County Commissioners.
A similar united front by retirees and active members led to last year’s great success in Illinois, when the members of Retiree Chapter 31 and AFSCME Council 31 won the battle to improve the state pension formula — among the worst in the nation. The victory they shared means future retirees will receive better benefits than those currently retired.
So, this year, the working members are returning the favor: A pension increase for state retirees is at the top of Council 31’s legislative agenda.
"Current pensions are very low," says Chapter 31 Pres. Doris Clark. "I wonder how some retirees survive. I retired in 1981 after working 28 years for the state. I couldn’t live on my pension if I didn’t have other savings."
FIGHTING CITY HALL. In Philadelphia, Retiree Chapters 2 and 47 are trying to get their first pension adjustment in 13 years. "Right now, it’s in the hands of the president of the city council," says Chapter 2 Pres. William Ruffin.
"This was our chapter’s very first resolution — for a pension increase," says Betty Flanagan, president of AFSCME’s brand-new Retiree Chapter 47. Her chapter leaders are already meeting jointly with Chapter 2 to work out a grassroots action plan.
That makes sense to New York’s Gary Tavormina. "No one ever won a COLA by himself," he says. "It takes teamwork. It takes a union."
By Susan Ellen Holleran
