Annual Adjustment Calculation
Annual Benefit Adjustment Calculation - PERS/SLRP
All PERS retirees and beneficiaries who have been receiving an allowance from PERS for at least one full fiscal year are eligible to receive an Annual Adjustment to the retirement benefit. The state's fiscal year is July 1st through June 30th. A member retiring effective July 1st, would be eligible for an Annual Adjustment during the fiscal year beginning 12 months later on July 1st. But if a member retired effective August 1st, the first Annual Adjustment would be paid during the fiscal year beginning July 1st, 23 months after the effective date of retirement.
To calculate the annual benefit adjustment (COLA) amount :
Step 1- Multiply your monthly base benefit by 12 to obtain your annual base benefit.
Step 2- Multiply the number of full state fiscal years in retirement prior to age 55 by 3% and multiply that percentage by the annual base benefit found in Step 1 above.
Step 3- Using the number of full state fiscal years in retirement beginning with the year you reached age 55, find the appropriate factor in the table below under the 3% Compound Interest Table. Then multiply the percentage factor from the Table by the annual base benefit found in Step 1.
Step 4- Add the amounts calculated in Steps 2 and 3 to determine the annual benefit adjustment.
Example: To demonstrate how this formula works, we will use a member receiving monthly gross benefits of $750 who retired at age 58 and who has been retired for thirteen (13) full state fiscal years.
Step 1. Monthly base benefits of $750 are multiplied by 12 to obtain an annual base benefit of $9,000.
Step 2. Since the member retired at age 58, there are no full state fiscal years in retirement prior to age 55, so a 0 is calculated for this step.
Step 3. This retiree has been retired thirteen (13) full state fiscal years. Reading the Compound Interest Table below the appropriate factor is 46.85%. This percentage of 46.85% multiplied by $9,000 equals $4,216.50.
Step 4. Zero (0) from Step 2 is added to $4,216.50 from Step 3 to get a total of $4,216.50 representing the annual benefit adjustment for the current state fiscal year.
COLA
CALCULATION INTEREST
TABLE
|
SIMPLE |
COMPOUND |
YEAR |
3.0% |
3.0% |
1 |
.0300 |
.0300 |
2 |
.0600 |
.0609 |
3 |
.0900 |
.0927 |
4 |
.1200 |
.1255 |
5 |
.1500 |
.1593 |
6 |
.1800 |
.1941 |
7 |
.2100 |
.2299 |
8 |
.2400 |
.2668 |
9 |
.2700 |
.3048 |
10 |
.3000 |
.3439 |
11 |
.3300 |
.3842 |
12 |
.3600 |
.4258 |
13 |
.3900 |
.4685 |
14 |
.4200 |
.5126 |
15 |
.4500 |
.5580 |
16 |
.4800 |
.6047 |
17 |
.5100 |
.6528 |
18 |
.5400 |
.7024 |
19 |
.5700 |
.7535 |
20 |
.6000 |
.8061 |
21 |
.6300 |
.8603 |
22 |
.6600 |
.9161 |
23 |
.6900 |
.9736 |
24 |
.7200 |
1.0328 |
25 |
.7500 |
1.0938 |
26 |
.7800 |
1.1566 |
27 |
.8100 |
1.2213 |
28 |
.8400 |
1.2879 |
29 |
.8700 |
1.3566 |
30 |
.9000 |
1.4273 |