SDCERS Board Approves Annual Retiree COLA, Effective July 1, 2012

Date: Jul 01, 2012

 

The SDCERS Board of Administration has approved the annual Cost of Living Adjustment (COLA), effective July 1, 2012, to be applied to the retirement benefits of eligible SDCERS retirees. COLA is also applied to survivor benefits.

For eligible retirees who retired prior to July 1, 2012, a COLA increase of 2% will be applied. Eligible 1981 Plan retirees will receive a 1.4% COLA increase. Special Safety Class retirees are not eligible for COLA increases. Survivors receiving a continuance receive the COLA of whichever group to which the deceased member belonged. 
 

How the COLA amount is determined

The COLA is based on increases or decreases in the nationwide Consumer Price Index (CPI) in the last calendar year, as measured by the Bureau of Labor Statistics of the U.S. Department of Labor. CPI increases that exceed 2% in any given year will be "banked" for future years. In years when the CPI does not increase up to the 2% COLA maximum, the difference will be taken from the retiree's "COLA bank" to provide a full 2% increase.

This year, the annual CPI change for those retirees who retired prior to July 1, 2012 was 3%, so the 1.0% excess will be added to the COLA bank for that group. For 1981 Plan members, the annual CPI change was 2.7%. The allowable COLA for this group is 50% of the CPI -- or 1.4%.




Document Under Categories: Board, COLA

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