COST-OF-LIVING ADJUSTMENT (COLA) CHART

SUSPENSION OF COST-OF-LIVING ADJUSTMENTS

Chapter 78, P.L. 2011, the Pension and Health Benefit Reform Law, suspended future Cost-of-Living Adjustments (COLA) for all retirees of all retirement systems. This suspension is effective for benefits payments made as of August 1, 2011.

It is important to note that the law does not reduce any COLA increases made to retiree benefits prior to the effective date of the law. The amount of money a retiree or benefit recipient currently receives each month will not be reduced by this law.

Chapter 78 also provides for the establishment of Pension Committees which may consider reinstating the COLA when the retirement systems reach “target funded ratios” established by the law. At that time, the Pension Committees are to give the reactivation of the COLA priority consideration.

“Target funded ratio” means a ratio of the value of assets against the accrued liabiliites of 75% and increasing annually by equal increments over seven fiscal years to a ratio of 80%.

COST-OF-LIVING ADJUSTMENTS PRIOR TO SUSPENSION

Prior to the suspension of COLA increases under Chapter 78, the COLA calculation was determined using the factors listed below.

The percentage shown for the year of retirement is applied to the "regular allowance" to determine a retiree's COLA.

• To find the regular allowance, see the "Current Earnings" section of the Statement of Allowances and Deductions which accompanies monthly pension checks.
  
  
• For benefits received by Direct Deposit, or if you do not have the Statement of Allowances and Deductions, call (609) 292-7524 and follow the prompts for "Retirement Information" to hear the allowances and deductions over the phone.

• For COLA recipients who retired in 2007 and earlier, the 2011 COLA used an "offset calculation" to adjust for an amount equal to a reduction that should have occurred in 2010. See additional information on the "offset calculation."
  

For additional information on the calculation of your COLA,
see Fact Sheet #18, Cost-of-Living Adjustments Adobe PDF (24K)

¹ For COLA recipients who retired in 2008 and 2009 there was no offset since no COLA was paid to these retirees in 2010. For 2011 the CPI used for the 12 months ending August 31, 2010 was 212.94.

² Under a provision of Chapter 78, P.L. 2011, future Cost-of-Living Adjustments (COLA) are suspended for retirees and benefit recipients of all retirement systems. Please be assured, there is no reduction to any COLA increases that were already added to retiree benefits prior to the effective date of the law.

Last update: February 4, 2013