BOR APPROVES 2013 RETIREE COST-OF-LIVING ADJUSTMENT
At its February 14th meeting, the Board of Retirement (BOR) approved a +2.0 percent 2013 cost-of-living-adjustment (COLA) for retirees and eligible survivors. The increase, which is effective April 1, will be reflected in your April 30th check.
Statistics released by the Bureau of Labor Statistics on January 16, 2013 indicate the percentage difference between the December 2011 and December 2012 CPI Indexes for All Urban Consumers for the Los Angeles-Riverside-Orange County area is +1.9 percent. When rounded to the nearest one-half of one percent, as prescribed by law, the result is 2.0 percent.
Two percent is less than the maximum increase (3.0 percent ) allowed in LACERA Plan A. In Plans B, C, D, and E the maximum allowable increase is 2.0 percent.*
According to the provisions of LACERA retirement plans, if the COLA percentage exceeds the maximum allowable (as it often did in past years), the excess percentage is accumulated to supplement future COLA benefits. The accumulated percentage carryover is known as the COLA Accumulation. The longer you have been retired (or receiving a survivor’s allowance), the more COLA carryover you have accumulated.
LACERA uses the COLA Accumulation to fund the maximum increase allowable under each Plan.
2013 COLA ADJUSTMENT: EFFECT ON Plan A RETIREES & SURVIVORS
Plan A retirees and eligible survivors with sufficient COLA Accumulations, will draw from their Accumulations to in order to receive the 3.0 maximum percentage increase allowed under their Plan. As indicated in the chart below, certain groups of Plan A retirees and survivors have no COLA Accumulations from which to draw; others have only enough to partially supplement this year’s COLA.
Since this year's COLA is 2.0 percent, the maximum increase allowed in the other LACERA plans, retirees and survivors in Plans B, C, D, and E have no need to draw from their COLA Accumulations.
|Retirement Date**||2013 COLA
|Prior to 4/1/85||2.0%||+||1.0%||=||3.0%|
|4/1/85 – 3/31/86||2.0%||+||0.2%||=||2.2%|
|4/1/86 and later||2.0%||+||0.0%||=||2.0%|
2013 COLA adjustments take effect with the April 2013 allowances.
View the COLA Accumulation chart.
*Plan E COLA (Automatic COLA) increases apply only to service credit earned after June 4, 2002. 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 defined as the months of service earned after June 4, 2002, divided by the total months of service. COLA adjustments also apply to pre-June 4, 2002 Plan E service credit for which Elective COLA was purchased.
**Retirement date also applies to survivors of LACERA retirees who died during that period.