Subject: Pension COLA / 13th Check
Are we to expect a COLA raise next year in light of surging inflation ??
The answer is yes …. exactly how much will not be known until approximately January 15, 2022. From what we currently know, the COLA will be greater than 6%. Each retiree who retired prior to 9/30/1999 will receive the full COLA in their January 31, 2022 pension check. The rest of us will receive 75% of that 6% number or 4.5%…. assuming the final inflation COLA number is 6%.
If the final number is greater than 6% it will be 75% of the the greater number.
The Pension Law caps the COLA increase beginning at 8%, the full explanation of the capped COLA can be found in the Pension Law.
The preliminary pension fund performance numbers are in for 2020. It appears we will have greater than a 9% return for the year ended 2020. This is amazing since our investment performance as of April 2020 was approximately a negative 5%. In fact, our performance as of September 30, 2020 was .6% ( less than 1% ). The final quarter of 2020 , we ended the year with investment performance that should allow the Board to issue a 13th Check. The Board has not yet met to determine when this check will be issued, but if the positive 9% return holds, as performance numbers come in from our non-publicly traded investments, I expect we will receive a 13th Check in March 2021.
I will keep you informed if things change, but I expect 2020 investment returns, coupled with the previous 4 years will allow the Board to vote in favor of issuance of a 13th Check.