COLA's pension - capped or not capped

[Redbugdave]

Here is how my Federal COLA is calculated.

For Federal Employees Retirement System (FERS) or FERS Special benefits, if the increase in the CPI is 2 percent or less, the Cost-of-Living Adjustment (COLA) is equal to the CPI increase. If the CPI increase is more than 2 percent but no more than 3 percent, the Cost-of-Living Adjustment is 2 percent. If the CPI increase is more than 3 percent, the adjustment is 1 percent less than the CPI increase. The new amount is rounded down to the next whole dollar.

I guess something is better than nothing.

Only thing...the FERS COLA only begins at age 62. No COLA until then...

 

[Bikerdude]

Cola pensions are much more valuable than non-cola. I have a non-cola but between SS and expenses not subject to inflation I only need to match or exceed inflation on 45% of total income.

 

[TuborgP]

Wife and I both have pensions along with SS. Pensions have annual COLA of up to 3 Percent compounded. We look to investments to provide us with additional COLA each multiple of our combined pensions providing us with additional COLA based on returns. Hope this is understandable.

 

[kyounge1956]

There are also pensions with a COLA floor. Mine has a fixed 1.5%/year increase, with a floor at 65% of the original purchasing power. After that I believe it would increase each year by the CPI. My mom's pension also has a floor. She's been retired for many years so I assume hers is being kept at floor level now.

 

[Kaufmanrider]

Only thing...the FERS COLA only begins at age 62. No COLA until then...

You might want to double check that. If you retire under the FERS Special Retirement as a LEO/ATC/FF you begin receiving COLA's as soon as you retire.

I know, I am one.


Cost of Living Adjustments
Your annuity will be increased for cost-of-living adjustments, if:
You are over age 62; or
You retired under the special provision for air traffic controllers, law enforcement personnel, or firefighters; or
You retired on disability, except when you are receiving a disability annuity based on 60% of your high-3 average salary. This is generally during the first year of receiving disability benefits; or
Your retirement includes a portion computed under Civil Service Retirement System (CSRS) rules.
FERS retirees under age 62 who do not fall into one of the categories above, are not eligible for cost-of-living increases until they reach age 62.

 

[Redbugdave]

Yes, you are right. LEO's, ATC, etc., do get the COLA as soon as they retire. But regular Govt employees do not till 65.

Edit to add...CSRS retirees get COLA, FERS requirements are quoted above.

 

[RockyMtn]

Two pensions await. Neither is COLA'd.

 

[Betty Noir]

Qualified NY retirement system members receive a partial COLA based only on the first $18K of the pension. The COLA amount is one-half the CPI, with a minimum of 1% and a maximum of 3%. I'm happy to have it because many pension plans have no COLAs.

Some have been trying to have the base amount increased from $18K to $25K, with no success (not surprisingly).

 

[johnrlawjr]

I chose to pay more during my working career to get an unlimited COLA provision on my pension. Time will tell if that bet pays off.

 

[ocdokie]

I have a State government pension. When I retired in 2010 the pension statutes contained an automatic annual COLA provision, but the Legislature removed that provision in 2011. So, no more COLA; but the funding status of the pension system jumped up considerably as a result.

 

[OAG]

Right, no cap on military/CSRS fed pensions, but the COLA has been pretty pathetic in recent years. I retired in 2010, and here are the annual COLA's since then:

January 2010 -- 0.0%
January 2011 -- 0.0%
January 2012 -- 3.6%
January 2013 -- 1.7%

And the last I heard, the COLA in Jan. 14 is on track to be around 1.3% or so.

Sure, it's still better than not getting a COLA, but it ain't much. I realize that could change in the future........

I don't mean to quibble but prior to 2010 there was only one other 0% COLA back in the 1980's and in 2009 I think it was 5.8% (11.1% over the past 5 years is not too bad IMO). Also the Military retirees have Tricare or Tricare For Life to mitigate a possible major upcoming expense (for however long that will last).