WAC 415-02-350
What are cost-of-living adjustments
(COLA) and how are they calculated? (1) What is a
cost-of-living adjustment (COLA)? The value of a retiree's,
beneficiary's, or ex-spouse's monthly allowance may change in
the years after retirement because of inflation or other
factors. A COLA automatically adjusts benefits based on the
cost of living changes.
(2) What retirement plans include COLAs? With one
exception, all retirement plans administered by the department
provide one or more of the types of COLAs listed in subsection
(3) of this section. The judges retirement fund (chapter 2.12 RCW) does not provide a COLA.
(3) What are the types of COLAs?
(a) Auto COLA
The auto COLA, if offered under your plan, is an option
you may select at retirement. If you choose this option, your
monthly retirement allowance will be actuarially reduced at
retirement, and you will receive an automatic adjustment in
your monthly retirement allowance each year for the rest of
your life. The auto COLA has no age requirement and is
limited to a maximum of three percent of your monthly
allowance.
(b) Base COLA
The base COLA is applied in July (April for LEOFF Plan 1)
of each year and adjusts the benefit based on the change in
the Consumer Price Index for the Seattle-Tacoma-Bremerton,
Washington area. Base COLAs are limited to a maximum of three
percent of the monthly allowance for all affected plans except
LEOFF Plan 1. During a calendar year, the base COLA is
payable to:
(i) Retirees who have been retired for at least one year
by July 1st of each year (April 1st for LEOFF Plan 1); and
(ii) Beneficiaries or eligible ex-spouses who receive
benefit payments from an account that, by July 1st, has paid a
monthly benefit for at least one year (April 1st for LEOFF
Plan 1).
(c) Uniform COLA
The uniform COLA is an annual adjustment to the benefit,
based on years of service. The annual adjustment for the
uniform COLA is independent from any other COLA. During a
calendar year, it is payable to:
(i) Retirees who, by July 1st, have received a retirement
benefit for at least one year and who, by December 31st, will
have reached age sixty-six or older;
(ii) Beneficiaries and eligible ex-spouses who receive
benefit payments from an account that, by July 1st, has paid a
monthly benefit for at least one year and who, by December
31st, will have reached age sixty-six or older; and
(iii) Retirees, beneficiaries, or eligible ex-spouses of
any age whose retirement benefit is calculated under the
minimum formula.
(4) Who is responsible for determining the amount of the
COLA? The office of the state actuary (OSA) bases the
percentages of the COLAs on the Consumer Price Index. The
Index is based on wages earned by urban wage earners and
clerical workers in the Seattle-Tacoma-Bremerton, Washington
area. OSA provides this information to the department
annually.
[Statutory Authority: RCW 41.50.050(5). 08-20-068, §
415-02-350, filed 9/25/08, effective 10/26/08; 08-01-079, §
415-02-350, filed 12/17/07, effective 1/17/08. Statutory
Authority: RCW 41.50.050(5), 2.10.170, 41.26.240, 41.26.440,41.37.160
, 41.40.197, 41.40.188 (1)(c), 41.40.640, 41.40.840,41.35.210
, 41.32.489, 41.32.530 (1)(d), 41.32.770, 41.32.845,43.43.260
. 06-18-009, § 415-02-350, filed 8/24/06, effective
9/24/06. Statutory Authority: RCW 41.50.050(5) and chapter 41.45 RCW. 03-06-044, § 415-02-350, filed 2/27/03, effective
4/1/03.]