LACERS
Board Approves Cost-of-Living Adjustment (COLA)
On April 13th, the Board of Administration approved a Cost-of-Living
Adjustment (COLA) to eligible retirees and will become effective July
1, 2004.
By May of each year, the Board is required to determine the Consumer
Price Index (CPI) for the Los Angeles area in order to provide a COLA
to eligible retirees. This COLA cannot exceed 3% annually (Administrative
Code Section 1040).
When the
CPI is greater than 3%, the difference is "banked" for future
years when the CPI is less than 3%. LACERS can then use available "banked" amounts
to increase the COLA to the maximum 3%. Just how much of a COLA that
a retired Member will receive depends on the retirement date and how
much is "banked" from previous years. The CPI for Los Angeles in 2003
was 2.6%.
Members
who retired on July 1, 2001 or earlier had sufficient "banked" amounts
to increase their COLA above the CPI to the maximum 3%.
Those
who retired on July 2, 2001-July 1, 2002 had only nominal amounts "banked," allowing
a COLA of 2.7%.
Those
who retired on July 2, 2002 and after had no "banked" amounts
because the CPI was less than 3% for that period. As a result, their
COLA will be 2.6%. Those who retired on July 2, 2003 and after will
have their COLA prorated at 1/12th of 2.6% for each full month of
retirement completed by July 1, 2004.
The Retiree Cost-of Living Adjustment (COLA), based on a retired Member's
effective retirement date, is:
Effective
Date of Retirement |
COLA |
| July 1, 2001 and earlier |
3.0% |
| July 2, 2001 to July 1, 2002 |
2.7% |
| July 2, 2002 to July 1, 2003 |
2.6% |
| July 2, 2003 to July 1, 2004 |
1/12th of 2.6% for each full month
of retirement completed by 7/1/04 |
Member Communications
LACERS
April 14, 2004
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