January 2015 COLA Set at 2% to Keep Pace with Inflation

The PSRS/PEERS Board of Trustees set the 2015 cost-of-living adjustment (COLA) at 2% during their August 25, 2014 meeting. Eligible benefit recipients will receive the COLA effective with January 30, 2015 benefit payments.

PSRS/PEERS provides COLAs for eligible benefit recipients to help their retirement income keep pace with the cost of living during times of inflation. According to the Consumer Price Index for Urban Consumers (CPI-U) as measured by the U.S. Bureau of Labor Statistics, the rate of inflation July 1, 2013 to June 30, 2014 was 2.07%.

How COLAs are Determined

The Board follows the guidelines set in Missouri law with regard to COLAs. In addition, since August 2011, PSRS/PEERS COLAs have been determined according to the Funding Stabilization Policy adopted by the Board of Trustees. This policy has helped stabilize contributions, improve the pre-funded status of the Systems, while also providing inflation protection for benefit recipients.

"The Board understands how important this inflation protection is to our retirees," said Board Chairman, Aaron Zalis. "We are pleased that our funding policy has allowed us to continue to provide COLAs while also safeguarding the Systems' solid funding status."

Under the 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).

Funding Stabilization Policy and COLAs
Change in CPI-U COLA

Less than 0%

0%

0%-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, 2014 is eligible for COLAs in January 2016.

PSRS members are no longer eligible to receive COLA's once they reach the 80% COLA cap. The chart below summarizes PSRS COLA eligibility.

PSRS January 2015 COLA Eligibility
Retired in 1987 and earlier You have reached your 80% COLA cap

Retired in 1988

0.58% COLA

Retired in 1989-2013

2.00% COLA

Retired in 2014

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, 2014 is eligible for COLAs in January 2018.

PEERS members are no longer eligible to receive COLA's once they reach the 80% COLA cap. The chart below summarizes PEERS COLA eligibility.

PEERS January 2015 COLA Eligibility
Retired in 1987 and earlier You have reached your 80% COLA cap

Retired in 1988

1.27% COLA

Retired in 1989-2011

2.00% COLA

Retired in 2012-2014

Not yet eligible for a COLA

Qualified PSRS/PEERS beneficiaries can also receive COLAs.

If you are eligible for a COLA, it will be effective with your January 30, 2015 benefit. You will receive information regarding your new benefit amount in your annual Benefit Statement, mailed in January. Information will also be available by logging in to view your membership information.

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