- Am I automatically entitled to an annual cost-of-living increase in my retirement allowance?
No, Cost-of-Living Adjustments (COLAs) are not automatic. The procedure for granting a COLA is as follows:
- The decision to grant a COLA is made by the state legislature and Governor for retirees from the State and Teachers' Retirement Systems.
- Each year the PERAC Actuary advises the retirement boards of the increase in the Consumer Price Index. The retirement boards then can grant a COLA, but not over 3%. Notice must be given to the legislative body before the board grants the COLA.
- Once the legislation has been accepted by the retirement board and the legislative body, a retirement system can vote to grant an increase for a given year.
- Every member and beneficiary in that system who was receiving an allowance as of June 30 of the prior fiscal year would then be entitled to a COLA.
- The percentage increase in an allowance will be made on the full amount of an allowance up to a base of $12,000.
- A retirement board, with the approval of the local legislative body may increase the COLA base incrementally beyond the $12,000 level.
- The cost of living percentage is based on the cost of living increase granted under the Consumer Price Index, not to exceed 3%.
- If the COLA granted under Consumer Price Index is less than 3% then, pursuant to another local option section, the total COLA payable may be increased up to no more than 3% of $12,000 or the locally accepted COLA Base.
- The COLA base for retirees of the State Retirement System and the Teachers’ Retirement System is established each year by the Legislature as part of the annual appropriation act.
|Date published:||July 1, 2015|