January 2016 COLA Set at 2% for PSRS/PEERS Retirees

Eligible Public School and Education Employee Retirement Systems of Missouri (PSRS/PEERS) benefit recipients will receive a 2% cost-of-living adjustment, or COLA, on monthly benefits beginning with the January 29, 2016 benefit payment.

The PSRS/PEERS Board of Trustees set the COLA during their August 31, 2015 meeting.

COLAs help your retirement income keep pace with the cost of living during times of inflation. According to Missouri law, PSRS/PEERS bases COLAs on the Consumer Price Index for Urban Consumers (CPI-U). According to the U.S. Bureau of Labor Statistics, the CPI-U, or the rate of inflation, from July 1, 2014 to June 30, 2015 was .12%.

How COLAs are Determined

The Board follows the guidelines set in Missouri law when determining COLAs. In addition, COLAs are determined according to the Funding Stabilization Policy adopted by the Board in August 2011. This policy has helped stabilize contribution rates and improve the pre-funded status of the Systems, while also providing inflation protection for benefit recipients.

"The Board understands the importance of COLAs to our membership," said Board Chairman Aaron Zalis. "We are pleased that even in difficult economic times our funding policy provides inflation protection to our retirees."

Under this policy, the COLA can range between 0% and 5%, and is based on the change in the CPI-U for the preceding fiscal year (July 1 to June 30). This year, the CPI-U increased .12%, so the COLA is 2%.

Funding Stabilization Policy

Change in CPI-U

COLA

0% or less 0%
Between 0% and 5% 2%
5% or more 5%

Who is Eligible for COLAs?

PSRS service and disability retirees are eligible for COLAs on monthly benefits beginning the second January following their retirement date. For example, a PSRS member who retired July 1, 2015 is eligible for COLAs in January 2017.

PSRS January 2016 COLA Eligibility
Retired in 1988 and earlier You have reached your 80% COLA cap
Retired in 1989-2014 2.00% COLA
Retired in 2015 Not yet eligible for a COLA

PEERS service and disability retirees are eligible for COLAs on monthly benefits beginning the fourth January following their retirement date. For example, a PEERS member who retired July 1, 2015 is eligible for COLAs in January 2019.

PEERS January 2016 COLA Eligibility
Retired in 1988 and earlier You have reached your 80% COLA cap
Retired in 1989-2012 2.00% COLA
Retired in 2013-2015 Not yet eligible for a COLA

Qualified beneficiaries can also receive COLAs.

PSRS/PEERS retirees are no longer eligible to receive COLAs once the total dollar amount of COLAs they have received equals 80% of their initial benefit amount (80% COLA cap).

For More Information

Your annual Benefit Statement, mailed in January, will contain information on your benefit amount, and will show COLA information, if you are eligible. Information on COLAs is available online by logging in to view your membership information in Web Member Services. If you are eligible for a COLA in January, that information will be available online in mid-January. You can also use the online COLA calculator to estimate the effect of a COLA on your benefit.

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