COLA 2010
2010 COST-OF-LIVING RETIREE BENEFIT ADJUSTMENT
At its February 11th meeting, the Board of Retirement (BOR) approved a +2.0 percent 2010 COLA adjustment for retirees and eligible survivors, effective April 1, 2010.
California Government Code mandates that each year, prior to April 1, the BOR determines whether there has been an increase or decrease in the cost of living, as reflected in the Bureau of Labor Statistics Consumer Price Index (CPI).
Statistics released by the Bureau of Labor Statistics on January 15, 2010, indicate the percentage difference between the December 2008 and December 2009 CPI Indexes for All Urban Consumers for the Los Angeles-Riverside-Orange County area is +1.8 percent. When rounded to the nearest one-half of one percent, as prescribed by law, the difference becomes 2.0 percent.
Following BOR approval, qualified members and eligible survivors in Plans B, C, D, and E will receive a 2.0 percent increase (the maximum allowed by their Plans) in their monthly allowances, beginning with their April 2010 checks.*
The maximum allowable adjustment in Plan A is 3.0 percent. Plan A retirees and survivors with retirement dates prior to April 1, 2005, will draw from their COLA Accumulations to supplement the increase to receive the maximum 3.0 percent. Plan A retirees and survivors with retirement dates of April 1, 2005, and later will receive a 2.0 percent increase because they have no COLA Accumulations from which to draw.**
According to the law, the BOR must accumulate the difference between any CPI Index percentage change and the maximum percentage allowable in each plan, and use it to fund or supplement a future COLA benefit. The accumulated percentage carryover is known as the COLA Accumulation.
The COLA Accumulation chart has been updated to reflect BOR approval of the 2010 COLA.
*Plan E 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.
**Retirement date also applies to survivors of LACERA retirees who died during that period.
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