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2011 Retiree COLA

At the Regular Board Meeting on December 16, 2010, the System's actuary informed Trustees that he could not recommended a Cost of Living Adjustment (COLA) be paid this year. Section 6.01(d)(3) requires that ".The cost-of-living increase presented for approval by the board must be approved by the system's actuary." As the System's actuary we are not willing to approve a January 1, 2011 COLA because: (1) the actual amortization period of 29.3 years as of the most recently completed actuarial valuation date (December 31, 2009) is at the upper end of the 25 to 30 year preferable range, and (2) the projected amortization period for the December 31, 2010 valuation is above the 25 to 30 year preferable range, and (3) the four projected annual valuations beginning December 31, 2010 reveal a generally increasing trend in future amortization periods. While our Board and Staff regret to inform you of this, they ask you to keep in mind the financial stability of your System is of the utmost importance to them and future increases will be evaluated. Holiday greetings go out to everyone from the Board and Staff for a safe and happy Holiday Season with a prosperous New Year.

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