2020 PERA Cost of Living Increases

From the PERA website:

2020 Postretirement Increases for PERA Members

October 15, 2019

Monthly benefit payments to retired members of the General Employees Retirement Plan will increase by 1% in January. Police & Fire Plan retiree benefit payments will also increase by 1% while Correctional Plan retirees will receive a 1.6% increase. 

Annual retiree postretirement increases for General and Correctional members are tied to the same Consumer Price Index used by the Social Security Administration (SSA) to determine the annual Social Security benefits increase.  The SSA recently announced that the January 2020 Social Security benefits increase will be 1.6%. General retirees receive 50% of the Social Security increase, but not less than 1.0% or greater than 1.5%. The 1.0% minimum will apply in 2020. PERA Correctional retirees receive 100% of the Social Security increase, but not less than 1.0% or greater than 2.5%. Correctional retirees will receive the full Social Security adjustment of 1.6%. The annual increase for PERA Police & Fire retirees will be 1% because their increase is a fixed rate not currently tied to an inflation index.

 PERA moved to tie annual increases to a Consumer Price Index as part of the 2018 legislative package. The goal is to more closely connect increases to actual inflation during both lower and higher inflationary periods. This can help ensure more equitability from one generation to another. Past attempts to tie increases to investment returns, funding status, or use fixed rates have resulted in measurable intergenerational inequities. The use of minimums, maximums, and varying percentages were all a result of what each plan was considered able to afford.

*The original proposal sought to cap the PERA Correctional Retirees at 1.5%. See previous posts, we were able to protect the range for PERA Correctional Retirees between 1-2.5% based on Social Security Benefit increases, which are based on inflation. While not ideal, when inflation is higher the PERA Correctional Retirees will recieve the larger increase.