BOR APPROVES 2015 RETIREE COST-OF-LIVING ADJUSTMENT
At its February 12 meeting, LACERA’s Board of Retirement approved a +0.5 percent 2015 cost-of-living adjustment (COLA) for retirees and eligible survivors, effective April 1, 2015.* This increase will be reflected in your April 30 allowance. The adjustment is based on the change in the cost of living from December 2013 to December 2014, as released by the Bureau of Labor Statistics Consumer Price Index (CPI) for all Urban Consumers in the Los Angeles-Riverside-Orange County metro area. The year-to-date change is .73 percent. Rounded to the nearest one-half of one percent, as prescribed by law, the result is 0.5 percent.
This year’s 0.5 percent COLA increase is less than the maximum allowable in any LACERA retirement plan. The maximum increase allowable under Plan A is 3.0 percent; the maximum increase allowed in Plans B, C, D, and PEPRA Plans G and C is 2.0 percent; the maximum increase allowable under Plan E is up to 2.0 percent.
*Includes eligible beneficiaries and alternate payees.
Qualified Retirees, Survivors Will Draw from COLA Accumulations to Supplement 2015 COLA
According to the law, in years in which the COLA percentage exceeds the maximum allowable, the excess amount is accumulated to supplement future COLA benefits. This accumulated percentage carryover is called the COLA Accumulation. Think of it as a COLA bank — the longer you have been retired (or receiving a survivor’s allowance), the more COLA carryover you will have accumulated.
|Retirement Plan||Retirement Date*||2015 COLA Adjustment||+||Withdrawal from COLA Accumulation||=||Total 2015
|N/A = zero COLA Accumulation|
|Plan A||Prior to 4/1/1982||0.5%||+||(-2.5%)||=||3.0%|
|Plan A||4/1/82 – 3/31/83||0.5%||+||(-0.1%)||=||0.6%|
|Plan A||4/1/83 – 3/31/15||0.5%||+||N/A||=||0.5%|
|Plans B, C, D||Prior to 4/1/06||0.5%||+||(-1.5%)||=||2.0%|
|Plans B, C, D||4/1/06 – 3/31/15||0.5%||+||N/A||=||0.5%|
|PEPRA Plans G, C||All Dates||0.5%||+||N/A||=||0.5%|
|Plan E**||6/4/02 – 3/31/06||0.5%||+||(-1.5%)||=||Up to 2.0%|
|Plan E||4/1/06 – 3/31/15||0.5%||+||N/A||=||0.5%|
*Date also applies to retiree’s survivor or beneficiary(ies) and/or alternate payee.
**Plan E COLA increases apply only to service credit earned after June 4, 2002, and any purchased Plan E Elective COLA. Plan E members who retired after June 4, 2002 will receive up to a 2 percent COLA increase. The portion of the 2 percent COLA is based upon a ratio of the months of service earned after June 4, 2002, plus any purchased Plan E Elective COLA, divided by the total months of service.
The amount available to fund a supplement is limited to the accrued balance of your COLA Accumulation. If your COLA Accumulation balance is not sufficient to fund the difference between the 0.5 percent COLA and the maximum allowed under your plan, LACERA will apply an increase equal to the amount remaining in your COLA Accumulation. As this chart illustrates, this occurs this year with Plan A retirees with retirement dates from 4/1/82 – 3/31/83.
2015 COLA adjustments take effect with the April 2015 allowance.
View the COLA Accumulation chart.