2006 COLA Fact Sheet  

What is COLA?

COLA stands for cost-of-living-adjustment. This is an annual adjustment to your retirement benefit that is based on 50% of the Consumer Price Index (CPI).

Why am I receiving COLA?

Retirement and Social Security Law, provides for a permanent COLA payment to eligible pensioners beginning in September 2000 and paid every September thereafter. If you retired prior to 1997 and first become eligible for COLA this September, you will receive the Year 2000 Supplementation plus the 2006 COLA increase.

Who is Eligible?

• Disability retirees, regardless of age who have been retired for at least 5 years
• Service retirees, beginning at age 62 and who have been retired for at least 5 years
• Service retirees, beginning at age 55 and who have been retired for at least 10 years
• Beneficiaries receiving an Accidental Death Benefit, regardless of age, who have been receiving that benefit for at least 5 years
• Spouses receiving a joint-and survivor option benefit are eligible to receive 50% of the monthly COLA that the retiree would have been eligible for

Who is not Eligible?

• A surviving spouse who is a Designated Annuity (DA) of a retiree who died on or after January 1, 1980
• Most Tier 3 retirees, because the statutory escalation they are receiving is greater than the COLA which would otherwise be payable
• Non-spouse beneficiaries
• Beneficiaries of the 5 or 10 Year Certain Option

How is COLA Calculated?

The COLA calculation is based on 50% of the CPI. This figure is then multiplied by either $18,000 or your Maximum Retirement Allowance (including any prior years’ COLA paid under this legislation), whichever is less. The result is then added to any previous permanent COLA amounts. The sum of these COLA figures equals this year’s COLA payment.

How does my COLA relate to the CPI?

The CPI is generally the best measure for adjusting payments to consumers when the intent is to allow consumers to have equivalent purchasing power for goods or services even through prices for those same items may have risen. The legislation providing for this permanent COLA payment specifically states that the amount will be based on:

• The CPI for each calendar year
• 50% of the annual inflation rate (as determined by the CPI) from the 12-month period ending March 31 st in the year in which the COLA is paid
• Not less than 1% nor more than 3%
• 2006 COLA percentage increase is 1.7%

If you have questions regarding your COLA please contact Employee Benefits at (347) 643-8550 (OA Retirees) or NYCERS at (347) 643-3000 (TA Retirees).

For useful information regarding your benefits and forms please visit our Internet website at www.mta.info. Click on the NYC Transit link then click on the “Retiree Online” link.