Washington Administrative Code › Title 415 - Retirement Systems, Department of › Chapter 415-02 - General provisions › ACTUARIAL FACTORS AND SCHEDULES › Section 415-02-350 - What are cost-of-living adjustments (COLA) and how are they calculated?

Current through Register Vol. 24-14, July 15, 2024
(1)
What is a
				cost-of-living adjustment (COLA)?
The value of a retiree's,
				beneficiary's, or ex-spouse's monthly benefit may change in the years after
				retirement because of inflation or other factors. A COLA automatically adjusts
				benefits based on the cost of living changes.
(2)
What retirement plans include
				COLAs?
With one exception, all retirement plans administered by the
				department provide one or more of the types of COLAs listed in subsection (3)
				of this section. The judges retirement fund (chapter 2.12 RCW) does not provide a COLA.
RETIREMENT SYSTEM
PLAN
COLA TYPE
STATUTE
JUDICIAL
Base
RCW 2.10.170
LEOFF
Plan 1
Base
RCW 41.26.240
LEOFF
Plan 2
Base
RCW 41.26.440
PSERS
Base
RCW 41.37.160
PERS
Plan 1
Uniform
RCW 41.40.197
PERS
Plan 1
Optional
RCW
								41.40.188(1)(c)
PERS
Plan 2
Base
RCW 41.40.640
PERS
Plan 3
Base
RCW 41.40.840
SERS
Plans 2 and 3
Base
RCW 41.35.210
TRS
Plan 1
Uniform
RCW 41.32.489
TRS
Plan 1
Optional
RCW
								41.32.530(1)(d)
TRS
Plan 2
Base
RCW 41.32.770
TRS
Plan 3
Base
RCW 41.32.845
WSPRS
Plans 1 and 2
Base
RCW 43.43.260
(3)
What are the types of COLAs?
(a)
Optional COLA
The optional COLA is an option you may select at retirement.
				  If you choose this option, your monthly retirement benefit will be actuarially
				  reduced at retirement, and you will receive an automatic adjustment in your
				  monthly retirement benefit each year for the rest of your life. The optional
				  COLA has no age requirement and is limited to a maximum of three percent of
				  your monthly benefit.
(b)
Base COLA
The base COLA is applied in July (April for LEOFF Plan 1) of
				  each year and adjusts the benefit based on the change in the Consumer Price
				  Index for the Seattle-Tacoma-Bremerton, Washington area for all plans except
				  the Judicial Retirement System which is based on the U.S. City Average. Base
				  COLAs are limited to a maximum of three percent of the monthly benefit for all
				  affected plans except LEOFF Plan 1. During a calendar year, the base COLA is
				  payable to:
(i) Retirees who have been
				retired for at least one year by July 1st of each year (April 1st for LEOFF
				Plan 1); and
(ii) Beneficiaries or
				eligible ex-spouses who receive benefit payments from an account that, by July
				1st, has paid a monthly benefit for at least one year (April 1st for LEOFF Plan
				1).
(c)
Uniform
				COLA
The uniform COLA is an annual adjustment to the benefit,
				  based on years of service. The annual adjustment for the uniform COLA is
				  independent from any other COLA. During a calendar year, it is payable
				  to:
(i) Retirees who, by July 1st,
				have received a retirement benefit for at least one year and who, by December
				31st, will have reached age sixty-six or older;
(ii) Beneficiaries and eligible ex-spouses
				who receive benefit payments from an account that, by July 1st, has paid a
				monthly benefit for at least one year and who, by December 31st, will have
				reached age sixty-six or older; and
(iii) Retirees, beneficiaries, or eligible
				ex-spouses of any age whose retirement benefit is calculated under the minimum
				formula.