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Retirement Alert ! ! !Jan. 1, 2008 1.5% COLA is in Jeopardy!
Average ERS retiree may lose about $4,400 in retirement benefits
On average, ERS retirees will face a $4,400 shortfall in their expected pension incomes over their lifetimes unless the ERS Board takes action between now and January 1, 2008. Each year at its June Annual Meeting, the ERS Board of Trustees typically passes a resolution for a 1.5% increase effective the following July 1 and a 1.5% increase effective the following January 1.
This year the Board chose to grant only the July 1, 2007 increase. If the Board fails to approve, in a subsequent meeting this year, a motion for a 1.5% increase for January 2008, then our retirement checks will not increase for at least another ten months--July 2008. This means that the average retiree, who receives an annual pension of approximately $27,000, will lose almost $200 between January 1 and July 1, 2008. This may not sound like much, but that $200 equates to at least $4,400 if that average retiree has eleven years of remaining life expectancy. If this small increase is lost, it affects all future retiree income for as long as you live.
Please note that NOT everyone is losing this increase. The Boards of the Georgia Judicial Retirement System, the Georgia Legislative Retirement System, and the Public School Employees Retirement System all approved the 1.5% increase to take place in January 2008 for their covered retirees, and that action occurred on the same day that the ERS board took no action on a January 2008 increase for ERS retirees. It is interesting to note that the boards of each of these systems are comprised of practically the same board members that make up the ERS board. In the Board meeting of the Teachers Retirement System, those trustees approved the 1.5% increase in July 2007 and January 2008 for all of their members.
Wondering how long it has been since ERS retirees missed a COLA increase? Since the early eighties, for more than 25 years, (for 50+ consecutive semi-annual periods), the ERS Board has NEVER failed to grant a COLA increase to ERS retirees.
Why has the ERS Board of Trustees not also approved the January 1, 2008 increase for the first time in a quarter century? The answer to that question is not readily apparent. Could it be that outside influences are in effect? Rest assured that GSRA is asking questions and looking for answers. Your Association will be in contact with you shortly with more information.
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