FROM: Amy McInerny, Chief Financial Officer
SUBJECT: Retiree COLA - Effective April 1, 2025
RECOMMENDATION:
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Approve an annual retiree cost-of-living adjustment of 1% effective April 1, 2025.
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BACKGROUND:
Government Code (GC) section 31870 requires the cost-of-living adjustment (COLA) be calculated by rounding the percentage of annual increase or decrease in cost of living as of January 1st each year, as shown by the Bureau of Labor Statistics Consumer Price Index of All Urban Consumers (CPI) for the Riverside-San Bernardino-Ontario area, rounded to the nearest one-half percent. A COLA is provided at a maximum of 2% per year.
Segal (Segal), SBCERA’s independent actuary, has determined the COLA in accordance with GC section 31870 to be 1.0% as of January 1, 2025.
The COLA is calculated by comparing the area’s past two November CPI indexes. The Riverside-San Bernardino-Ontario area index is measured at each odd month. The ratio of these values, 132.853 in 2024 and 131.372 in 2023, is 1.13:
November 2024 = 132.853 = 1.0113
November 2023 131.372
GC section 31870 indicates that the resulting percentage change of 1.13% should be rounded to the nearest one-half percent, which is 1.0%.
SBCERA members and eligible beneficiaries who have a benefit effective date between April 2, 2024 and April 1, 2025, will receive a 1% COLA effective April 1, 2025.
SBCERA members and eligible beneficiaries who have a benefit effective date on or before April 1, 2024 have at least 2.5% in their respective accumulated COLA banks. These members will receive a total award of 2% and their banks will be reduced by 1%.
BUDGET IMPACT:
None.
STRATEGIC PLANNING GOAL/OBJECTIVE:
Prudent Fiscal Management
STAFF CONTACT:
Amy McInerny
ATTACHMENTS:
Exhibit A: Segal’s COLA Letter
Exhibit B: Frequently Asked Questions: COLA Adjustment