Mario explains our COLA

From Mario Iacone, March 31, 2012

STRS MEMBERS

NOTE

HOW YOUR COLA ACCUMULATES

If you RECEIVE a $40,000 BENEFIT, your COLA for 2012 is $1,200 or 3% of $40,000.

YOU RECEIVE $1,200 THIS YEAR and EVERY FUTURE YEAR.

THEREFORE, IF YOU RECEIVE BENEFITS for ANOTHER TWENTY YEARS,

The 2012 COLA PAYMENT of $1,200 WILL ACCUMULATE TO $24,000 (20x1200).

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More on the one year COLA suspension scenario

From Kathie Bracy, April 1, 2012

I asked Mario for a more detailed explanation of how a one year suspension of our COLA would affect us (retirees), and here is his response:

From Mario Iacone, April 1, 2012

If you lose your 2013 COLA, you never get it back. The following year you are getting your 2014 COLA.

For example, say you are getting $40,000 and you would go to 41,000 with this year's COLA.

This year's COLA is suspended so you stay at 40,000 instead of going to 41,000 with the COLA.

The next year, you get the 2014 COLA and go to 41,000, but if you had received the 2013 COLA the previous year, you would be getting $42,000.

So each year you would be getting $1,000 less because the COLA was suspended in 2013.

Figures are rounded of for ease of explanation. COLA on $40,000 would actually be $1,200.