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COLA (Update:
10-1-2012) |
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The
Cost-of-Living Adjustment (COLA) is
calculated differently for the
State/Teacher, Legislative and
Judicial Retirement Plans and for
the Participating Local Districts
(PLDs). Please read the information
below that pertains to your plan to
understand how the increase in the
Consumer Price Index for Urban
Consumers (CPI-U) will affect or
determine the COLA you will be paid
in 2012. |
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State/Teacher,
Legislative and Judicial Retirement Plans
The State of Maine
recently announced it has sufficient surplus
budget funds to cover the $12.1M dollars
needed to provide the full amount of the
first of three possible one-time COLAs to
eligible retirees in the State/Teacher,
Legislative and Judicial Retirement Plans.
2011 legislation froze
regular COLAs for eligible retirees in these
plans for a period of three years beginning
in 2011. The same legislation provided for
potential non-cumulative cost-of-living
adjustments (COLAs) for those three years to
be paid in 2012, 2013, and 2014 depending on
the availability of budget surpluses in each
prior fiscal year.
How much will retirees receive?
2011 COLAs are
determined by applying the 2011 CPI-U up to
3% to the first $20,000 of each eligible
retiree’s benefit. The increase in the CPI-U
for the year ending June 30, 2011 was 3.6%.
An example of what a retiree will be paid
is:
The maximum amount that
may be received by a retiree is $600, or
$20,000 x 3%.
An example of what a
retiree with concurrent beneficiary payments
(Option 5) or more than one benefit payment
eligible for the one-time COLA is:
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Member’s Option 5 Annual Benefit:
$20,000 (80% of total benefit)
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Beneficiary’s Option 5 Annual Benefit:
$5,000 (20% of total benefit)
Total COLA payment:
$600 (because the total benefit is more than
$20,000)
When and how will the
COLA be paid?
The COLA was paid in a lump sum on
Thursday, September 20, 2012.
Payments were deposited into the same
account or mailed to the same address as
your regular monthly benefit payment.
Unless you have filed as exempt for your
regular benefit payment, we withheld Federal
taxes at the rate of 20% and State taxes at
the rate of 5%. We mailed
notifications to all who receive the
payment, either in the form of a check or an
advice of deposit.
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Retirees
(including disability retirees and
beneficiaries/survivors) who were
eligible to receive a
COLA in September, 2011 except for
the freeze, are eligible for the
lump sum COLA: |
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You are eligible for the
one-time COLA payment in 2012 if you
are receiving a monthly
State/Teacher, Legislative or
Judicial benefit payment and were
eligible for COLA in 2011.
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Retirees and Option 5
beneficiaries of retirees in
an age 60 or special plan
who retired effective
9/1/2010 or before. |
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Retirees and Option 5
beneficiaries of retirees in
an age 62 plan who turned 62
by 8/31/2010 and retired
effective 9/1/2010 or
before. |
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Survivors and Beneficiaries
under options other than
Option 5 who began receiving
benefits effective 9/1/2011
or before. |
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Participating
Local Districts Retirement Plans
The Bureau of Labor released an increase in
the Consumer Price Index for Urban Consumers
(CPI-U) of 1.7% for the year ending June 30,
2012. The COLA for PLDS is calculated by
applying the CPI-U up to a maximum of 4% to
each eligible*
retiree’s current benefit. The full CPI-U of
1.7% for the 2012 COLA was adopted by the
MainePERS Board of Trustees at its August
meeting because it did not exceed the
maximum 4% allowable. Eligible recipients
will begin to receive this increase with
their September 2012 benefit payment.
PLD retirees do not receive the one-time
COLA.
* If
you are covered by a PLD retirement plan
that includes COLA, you are eligible for a
COLA equal to the CPI-U (up to 4%) after you
have been retired for at least 6 months.
You will receive a COLA beginning in the
September after you have met this
requirement.
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