ISTA-Retired Update on TRF COLA

FYI ISTA-Retired From Jerry Ervin PLEASE READ AND ACT
Subject: ISTA-Retired Update on TRF COLA

I just received this information from Roni Embry. I'm sure she will tell us more when she gives the legislative update to us at our meeting on Monday. However, I asked that she give us an update right away. Although this COLA (cost of living adjustment) will give us less money in the short term, raising the basic benefit, rather than a 13th check, will benefit retirees over the long term. Please share this with your members and contact your legislators to ask that they support the TRF/PERF COLA.

The House Ways and Means Committee passed HB 1231 - Pension Cost Of Living Adjustments. The bill passed the House Employment, Pensions and Labor Committee unanimously before it was recommitted to Ways and Means. Now it is alive in the full House and is up for 3rd reading and final passage on Monday, February 3rd.

Please contact your Representative and ask them to vote YES on providing a COLA to TRF/PERF retirees.

The bill provides a cost-of-living adjustment (COLA) to retirees in the PERF/TRF pension funds. The COLA would be provided for one year with a determination on a yearly basis afterwards.
Details of the COLA increase are:

• 1.5% COLA to a member who retired before January 1, 1983
• 1% COLA to a member who retired after December 31, 1982 and before January 1, 1995
• 0.5% COLA to a member who retired after December 31, 1994

The original bill provided a COLA increase of 3%, 2% and 1% respectively, but it was curtailed in Ways and Means.

There has been no COLA since 2008. Although a “13th check” has been provided in the years since, the amount does not compound with the base as it does with a COLA. There is also a 13th check bill, HB 1074 (Rep. Woody Burton, R-Whiteland), still moving in the House.

The state has a history of providing “catch up” funding to offset a decline in retirees’ purchasing power combined with inflation. Fiscal analysis shows that the fund is in good shape. In fact, actuarial projections also figure a 1% COLA each year, but the longer the legislature waits to provide it, the more likely it is that the percentage will decrease

Sherry Watkins