CONSUMER ALERTS

September 2009

Cost-of-living adjustment

Eligible retirees, eligible surviving spouse beneficiaries and other eligible beneficiaries will receive a Cost-of-Living Adjustment (COLA) increase in their September, 2009 benefit checks. Legislation approved in 2000 (Chapter 125 of the Laws of 2000) provides this permanent automatic COLA annually to all eligible retirees and beneficiaries.  This year’s increase is 1.0 percent.

Eligibility
The COLA will be paid automatically if you are eligible.  To be eligible, you must be:

• At least age 62 and retired at least five years; or
• At least age 55 and retired at least 10 years; or
• A disability retiree and retired at least five years, regardless of age; or 
• A spouse of a deceased retiree who receives a benefit under the joint-and- survivor option (Note: Spouse is entitled to half the COLA amount the retiree would have received); or
• A beneficiary who collects an accidental death benefit for at least five years, regardless of age. Calculation of the COLA Percentage

The COLA percentage is 50 percent of the increase in the Consumer Price Index (CPI), as of March 31, over the previous year. The percentage is rounded up to the next higher 1/10th of one percent and is limited to a maximum of three percent and a minimum of one percent.

Calculation of COLA Amount
Once the COLA percentage is determined, a retiree’s actual annual COLA amount is calculated by multiplying the COLA percentage by the lesser of either $18,000, or the fixed allowance at retirement without optional modification, plus any prior supplementation or COLA increases.  The monthly amount is determined by taking 1/12th of this amount.

COLA Amount for Certain Recipients
The law also provides certain other survivor beneficiaries (surviving spouse, dependent or child of a retiree of the former Police Pension Fund, Subchapter One, the former Fire Department Pension Fund, Subchapter One, or the Department of Street Cleaning) with an increase of $2.25 per month.

Eligible Designated Annuitants who were spouses of members who deceased prior to Calendar Year 1980 are also entitled to receive an increase of $2.25 per month.