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Public Agency 2% Provision Year of RetirementĪllowance Increase (COLA and PPPA) effective May 1, 2023 Multiplying your current gross allowance by the chart’s COLA and PPPA (if applicable) allowance increase percent, will provide an estimate of your 2023 COLA increase. There are select retirement years that also include Purchasing Power Protection Allowance (PPPA) benefits. The chart below provides the percent allowance increase a retiree will receive based on their employer contracted COLA percentage and their retirement year. Visit the Social Security Administration website for more information. The Social Security Administration uses a different method for calculating COLA benefits and is payable in January versus CalPERS benefits being paid in May. Social Security Administration COLA compared to CalPERS COLA If the rate of inflation since retirement is higher than the employer contracted COLA percentage, by law, we must apply the lessor of the two. Most state and all school agencies contract for a 2% per year COLA, and public agencies can contract for a 2%, 3%, 4%, or 5% per year COLA. (Use the Current Year Annual CPI – Previous Year Annual CPI) / Previous Year Annual CPI = Current Year Rate of Inflation To calculate the rate of inflation for 2022, we: The CPI represents the cost of an item compared to the cost in 1967. The 2022 annual CPI is 876.664 and the rate of inflation is 8.00%. CPI is determined by the BLS and, by law, it’s the official measure used by CalPERS to calculate COLA. We use the CPI at the time of retirement to calculate what your value of money should be when we adjust for COLA.
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