TRS retirees are currently paid a 1.5% cost of living allowance (COLA) each year. That COLA is pre-paid by retirees as part of the pension contributions they make during their active careers. The governor’s proposed pension bill will freeze COLAs for all current TRS retirees for at least 5 years, and will freeze COLAs for all future TRS retirees for at least the first 5 years after they retire. There is nothing in the bill to indicate what will trigger reinstatement of the COLAs after the 5 year period. A 5 year freeze will have a significant adverse financial impact on retirees, and the impact will compound each year that the COLA goes unpaid. If you are a TRS participant and want to see how much a COLA freeze could cost you, use this calculator.
If you don’t like what you see, call your legislators NOW at 1-800-372-7181 and let them know that they should find funding first and not pay for their own past-due obligations to the pension system by depriving retirees of the benefits they earned.