2010 COLA - A Decrease?
- By Mike German
- Published 08/5/2009
- Stuff
The all important numbers from the Bureau of Labor Statistics (BLS) are in from San Francisco and the news is not good.
The June ’08 through June ’09 inflationary index is a NEGATIVE -0.7%. This is the number used in the SPOG and SPMA collective bargaining agreements formula to determine salaries and ESCALATOR pension increases. Here’s the important facts:
LEOFF I COLA:
The annual LEOFF I COLA which is due on April 1, 2010, is very likely going to be small (LIKE 0% to 1%) or it even could turn out to be a negative number.
It all depends on the CPI monthly numbers for the remaining months of 2009. IF THE ANNUAL CPI AVERAGE FOR 2009 IS A NEGATIVE NUMBER, YOU WILL SEE A LEOFF I PENSION REDUCTION INSTEAD OF AN INCREASE IN 2010. THE LAST TIME A LEOFF I PENSION REDUCTION OCCURRED WAS IN 1984, WHICH SAW A NEGATIVE CPI NUMBER OF -0.27%. LEOFF I Pensioners and lawful beneficiaries had their pensions reduced in that year. Again, this could happen again in 2010. We have to wait and see. LEOFF I has a true COLA which can increase and decrease.
PRIOR ACT:
For those pensioners who have an entitlement or dual entitlements, both LEOFF I and a prior act like RCW 41.18 or RCW 41.eo , and who receive the “BEST OF BOTH,” the news from that front is better. That of course depends on how effective the local bargaining unit has been on establish new contract rates. Seattle Police retirees also covered by the prior act will receive the increases consistent with their current contract. Other jurisdictions may fair better as well if the labor contract has been settled at a rate higher than the final CPI.
It is important to remember that these COLA numbers are projections. But, given the trend it appears there will be little if any increase by the end of the year. A decrease is possible.
The June ’08 through June ’09 inflationary index is a NEGATIVE -0.7%. This is the number used in the SPOG and SPMA collective bargaining agreements formula to determine salaries and ESCALATOR pension increases. Here’s the important facts:
LEOFF I COLA:
The annual LEOFF I COLA which is due on April 1, 2010, is very likely going to be small (LIKE 0% to 1%) or it even could turn out to be a negative number.
It all depends on the CPI monthly numbers for the remaining months of 2009. IF THE ANNUAL CPI AVERAGE FOR 2009 IS A NEGATIVE NUMBER, YOU WILL SEE A LEOFF I PENSION REDUCTION INSTEAD OF AN INCREASE IN 2010. THE LAST TIME A LEOFF I PENSION REDUCTION OCCURRED WAS IN 1984, WHICH SAW A NEGATIVE CPI NUMBER OF -0.27%. LEOFF I Pensioners and lawful beneficiaries had their pensions reduced in that year. Again, this could happen again in 2010. We have to wait and see. LEOFF I has a true COLA which can increase and decrease.
PRIOR ACT:
For those pensioners who have an entitlement or dual entitlements, both LEOFF I and a prior act like RCW 41.18 or RCW 41.eo , and who receive the “BEST OF BOTH,” the news from that front is better. That of course depends on how effective the local bargaining unit has been on establish new contract rates. Seattle Police retirees also covered by the prior act will receive the increases consistent with their current contract. Other jurisdictions may fair better as well if the labor contract has been settled at a rate higher than the final CPI.
It is important to remember that these COLA numbers are projections. But, given the trend it appears there will be little if any increase by the end of the year. A decrease is possible.
1 Response to "2010 COLA - A Decrease?" 
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said this on 24 Jan 2010 3:24:36 PM PDT
The 2010 CPI increase will be .44%
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