Changes Across the System
This graph highlights the following scenarios, changes to current employee benefits only, changes to current employee benefits and retiree COLA, and changes to current employee benefits and with frozen retiree COLA.
Changes for Current Employees
The changes to Current Employee Benefits are as follows:
- Increase Retirement Age Eligibility by 5 Years
- Full Benefit
- Age 65 with 10 years
- Age 55 with 30 years
- Reduced Benefit
- Between Age 55-65 with less than 30 years
- With less than 30 years annuity reduced benefit by ½% for every month before age 65
- Reduce benefit multiplier from 2.4% to 2.2%
- Increase Final Average Salary to the highest consecutive 8 years in the last 10 years of service
- Reduce Cost of Living Adjustment to simple 3% or ½ the Consumer Price Index, whichever is lower
- Increase Employee Contributions by 1%
- Vesting time period is lowered from 10 years to 5 years. (Green and Blue Lines only)
Retiree Cost of Living Adjustment Changes
Changes to retirees only involve adjusting the cost of living (COLA) benefit increase. Instead of receiving a 3% compounding COLA every year, the proposal changes the COLA to a simple 3% of half of the Consumer Price Index (CPI), whichever is lower. The CPI is expected to increase at 3% annually and retirees will receive a simple 1.5% COLA. When this change is added to changes for current employees the funded status will increase to 83.3% by 2040 (Change included in blue and green lines).
Frozen Cost of Living Adjustments
The green line institutes a COLA freeze when the funded status is below 80%. While frozen a retiree will only receive a 3% compounded COLA every 5th consecutive year. When the funded status climbs back above 80% funded the retiree will continue receiving an annual simple 3% COLA or half the CPI. When a frozen COLA is added to the changes the funded status will be 94.4% funded by 2040 (Change included in blue line).