A cost of living adjustment (known as a COLA) is is an increase in the amount of a retiree’s or beneficiary’s pension payment in order to account for inflation. As time goes on and inflation increases, the daily costs of buying milk, filling up the gas tank, and paying bills take up more and more of retirees’ pension checks. COLAs are a way for governments to ensure retirees aren’t getting left behind, and that their pensions consistently provide the value that was earned over the course of a lifetime of service. When retirees are left without COLAs, the effect is far more wide-reaching than some might think.
In New Hampshire, retirees last received an automatic COLA over 8 years ago in 2010. In the years before that, since 1997, New Hampshire public employees, teachers, police officers, and firefighters consistently received COLAs that made up for the difference in inflation, making sure retirees were able to preserve their quality of life and maintain a dignified and secure retirement. Unfortunately, since 2010, the New Hampshire legislature has dropped the ball and left public employee retirees behind.
The average annual retirement benefit for New Hampshire retirees is just $19,943. As retiree healthcare costs increase on top of daily and monthly utilities and bills, that money depletes quickly. With every dollar paid out in pension benefits supporting $1.40 in total economic activity in New Hampshire, securing a COLA for retirees is more than just a moral imperative – it’s an economical one.
Leaving retirees with dwindling spending power is dangerous in more ways than one. Last year, both New Hampshire and Oklahoma introduced COLA legislation, but both were unsuccessful in achieving their goals. In New Hampshire, COLA proponents were able to secure a $500 stipend for a select group of retirees, but true COLA legislation is needed. As we move into the 2019 session, watch for COLA legislation from states like New Hampshire, Oklahoma, and Wyoming, where retirees haven’t received a cost of living adjustment in more than a decade.