Legislature Approves 3% for State and Teachers

July 06 - Boards Prepare For July COLA - Members who were on the pension rolls prior to July 1, 2005 can look forward to a new 3% COLA this July.

Both the House and Senate agreed to a 3% COLA for state and teacher retirees in their FY ’07 state budget (effective this July), thus taking care of the two largest retirement systems. The State and Teachers’ Retirement Boards are now preparing to pay this COLA to eligible retirees.

Most of our 104 local retirement boards have also voted for a 3% July COLA for their retirees and survivors. The few remaining boards will have voted for 3% prior to the end of June.

Members will recall it was our Association’s legislation (Chapter 17, Acts ’97) that allows the local boards to vote for these COLAs, an independent vote that does not require the approval of city councils, mayors or any type of local governing body.

With the $12,000 base still in effect, the maximum increase will be $360 or $30 per monthly. Despite the handicap of a limited base, which we are in the process of raising, a pension of $12,000 or greater has increased by $1,800 over the past five years.

The waiting period for a new retiree to receive a first COLA depends on the date of retirement. Anyone who retired between July 1, 2005 and June 30, 2006 will be eligible for the July 2007 COLA. The law requires a full fiscal year, not a full calendar year, between the date of retirement and a July COLA.