COLA for CalSTRS is a Reminder for UCRP and the Regents Thursday, June 02, 2022
CalSTRS, the state pension plan for school teachers, has a system in place to deal with the impact of high inflation on pensioners. It normally provides a 2% COLA (cost of living adjustment) which "works" OK when inflation is in that range to maintain purchasing power. But it also has a system in place to deal with the impact of higher inflation, basically by limiting the erosion of purchasing power so that pensions don't fall below 8085% of their real starting value. There is relevance in the CalSTRS approach for the UC pension plan which I will explain below. But first, note the item below from the Sacramento Bee: THE STATE WORKER Retired California teachers could receive checks to help cover inflation costs Wes Venteicher, 6-1-22
About 55,000 retired teachers would receive new payments to supplement their pensions under a proposal moving through the California State Legislature. Aimed at offsetting inflation, Senate Bill 868 would provide quarterly payments to teachers who retired before 1999. The proposal would deliver increases of 5% to 15% of their pensions depending on retirement year, with those who retired before 1980 eligible for the biggest bumps, according to a summary prepared by the California State Teachers’ Retirement System. The CalSTRS board supported the proposal early this year. The legislation cleared the state Senate last week. It requires approval from the Assembly and Gov. Gavin Newsom to become law. The new benefit would cost about $592 million, according to CalSTRS. The money would come from an account established in 1989 to help retired teachers cope with inflation. The account, which is separate from the system’s $318 billion investment fund, is supported by the state’s general fund, revenue from leased school lands and payments UCLA Faculty Association Blog: 2nd Quarter 2022
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