What is the COLA?

Cost-of-living adjustments (COLA) are granted to MTRS benefit recipients by vote of the Massachusetts Legislature and approval of the Governor through the annual state budget process.

The fiscal year 2021 COLA was approved as part of the state budget process, however much later than in previous years due to the impact of the coronavirus pandemic. The fiscal year 2021 COLA will be included in December benefit payments to eligible recipients and will be retroactive to July 1st, 2020.

Am I eligible for the fiscal year 2021 COLA?

You are eligible to receive the FY2021 COLA if your retirement date was on or before 06/30/2019.

How much will I receive?

The FY2021 COLA is 3% on the first $13,000 of your MTRS benefit, retroactive to July 1, 2020. Please use the formula corresponding to your annual benefit amount below to determine the increase to your December payment and ongoing monthly COLA payment amount:

a. If your Gross Annual Benefit is $13,000 or higher:

$13,000 x .03 (3%) = $390 gross annual increase

$390 annual increase/12 months = $32.50 monthly increase

$32.50/month x 6 months = $195 retroactive gross increase

b. If your Gross Annual Benefit is under $13,000:

Gross annual benefit x .03 (3%) = annual increase

Annual increase divided by 12 months = monthly Increase


$11,500 annual benefit x .03 (3%) = $345 gross annual increase

$345 annual increase/12 months = $28.75 monthly increase

$28.75/month x 6 months = $172.50 retroactive gross increase

When will I receive my retro COLA?

If eligible, your retroactive COLA will be included in your December benefit payment. As a reminder, retirement and survivor benefits are paid at the end of each month; thus, the allowance that you receive at the end of December is the payment for December. For further details please see the pension payment schedule.

How do I see the COLA on my December statement?

Your FY2021 COLA is incorporated into both your BASE amount and as a separate COLA line on your statement. The infographic below illustrates how the retroactive COLA for July – December 2020 appears on the statement of a recipient receiving the full COLA amount of $390/year, or $32.50/month.

The COLA amounts for the months of July through November are included in the BASE amount on your December statement. The COLA amount for the current month, December 2020, is listed as a separate amount.  The CURRENT GROSS is the sum of BASE and COLA.

Is the COLA taxable income?

Yes, but due to limitations in our computer system, please be aware that we were unable to withhold federal income taxes on the five months of retro COLA payments, from July 2020 to November 2020, that are included in your December BASE benefit.  This means that we did not withhold taxes on a maximum of $162.50 (5 months x $32.50) of your 2020 gross retirement income, and you may owe taxes on that amount when you file your tax return. Please note that the MTRS does not provide tax advice; you should seek advice from a professional tax advisor or the Internal Revenue Service.

Could a Qualified Domestic Relations Order (DRO) affect my COLA payment?

Members who split their benefit due to a Qualified Domestic Relations Order may not receive the full COLA payment. For instance, the agreement could state that the COLA increase is to be split amongst the member or benefit recipient and alternate payee.

Are there other December deductions to be aware of?

Yes. Health Insurance premium changes typically take place on a fiscal or calendar year basis. Premium changes for a coverage period of January 1st will be deducted from the December benefit payment as insurance premiums are pre-paid in the month prior to the coverage period.

Insurance is administered either by your former school district or the Group Insurance Commission (GIC). To determine which agency administers your insurance, look at the Deductions portion of the pension check or direct deposit statement. If a deduction is listed as Medical D, Medical I, Dental, Life Insurance, Option, or Other MED contact the school district’s local Benefit Coordinator for further questions. If a deduction is listed as Group Insurance or GIC Dental, contact the Group Insurance Commission at 617-727-2310, extension 6.

What else do I need to know?

Please keep in mind that because your December 2020 benefit payment includes the one-time retroactive COLA amount, your January 2021 benefit payment will be lower and will be your new monthly gross.

Watch your mailbox

At the end of January 2021 we will mail your 1099-R tax form and Benefit Verification form together in the same envelope.

Benefit Verification Process—Be sure to return this form by the date indicated!

1099-R Information

You will receive a paper year-end statement in for December 2020.

How to read your check or direct deposit statement