The Needham Retirement Board on Oct. 22 adopted a funding schedule that assumes a $20,000 COLA base starting July 1, 2026, and directed staff to complete an actuarial valuation for submission to the town and to the Public Employee Retirement Administration Commission (PERAC). The board approved the schedule in a 3-2 roll-call vote.

The action matters because the $20,000 base raises the town's near-term pension funding needs. Linda, a board staff member who presented the funding scenarios, said moving the COLA base from $18,000 to $20,000 effective July 1, 2026, would add about $2,400,000 to next year's cost. "That has a $2,400,000 price tag on it," Linda said, adding that the estimate includes future retirees and uses a 3% COLA assumption on the applicable base.

Board members and town officials had discussed multiple funding schedules that differ by timing and the pace of employer appropriations. The adopted option, labeled schedule A5 in the actuarial materials, spreads increases to the town's appropriation so next fiscal-year increases are smaller than an alternative that would front-load larger increases. Linda explained the schedule A5 structure and said it limits the annual employer-appropriation increase to a calculated maximum (about 8.01% in the near term) to amortize the system's unfunded liability by the board's target full-funding date of 2032.

During the discussion, several trustees argued for moving the $20,000 base earlier to provide immediate benefit to many retirees. One board member said the change would help roughly "300 and some people" who currently receive more than $20,000 annually, while noting that roughly 175 retirees receive $20,000 or less and would not see immediate increases from the base change. Linda clarified, "If you're a $10,000 pensioner, you're getting 3% of $10,000" and that raising the base does not immediately increase benefits for the lowest-paid retirees.

Board members also emphasized political considerations. The board staff reported they had met with Town Manager Kate King and Finance Director David Davidson to seek their views; the town officials favored delaying larger front-loaded requests and recommended returning to the finance committee and town meeting in 2027 rather than asking for larger appropriations two years in a row. Linda told trustees the town manager and the finance director considered the more front-loaded schedules a "no go." The board chair and one trustee said asking for an increased appropriation in consecutive years could hurt the board's chances with the finance committee and at town meeting.

After discussion of alternatives, Trustee Koike (board member) and Trustee Murrells (board member) were recorded voting in favor; Trustee Stiefes (board member) also voted yes. Trustee Swanson (board member) and the chair voted no. The clerk announced the tally as a 3-2 vote in favor of adopting schedule A5. The board directed staff to prepare the full funding valuation for PERAC and to present the funding schedule and supporting materials to the town manager and finance committee.

Board members made a separate motion to formally increase the COLA base to $20,000 at this meeting, but trustees agreed that the increase was not on the posted agenda for a COLA-base vote. That motion was deferred; the board decided to take the formal vote on the COLA base at its November meeting.

Next steps: staff will finalize the actuarial valuation using schedule A5, submit it to PERAC for review, and present the funding request and supporting materials to the town manager and the finance committee ahead of town meeting. The board plans to take the formal COLA-base vote at its November meeting.