Note: Changes were made to this provision during the 2007 legislative session.
You qualify for the Uniform COLA if you have been retired for at least one year by July 1 in the calendar year in which the increase is given, and you reach age 66 by December 31 of the same year. Your benefit will be adjusted each July thereafter. The size of your benefit adjustment will be based on the total service credit you accumulated as a TRS member.
If you chose a survivor option and you die, your beneficiary will receive the COLA in July following his or her 66th birthday, provided that it is at least one year after you retired.
The Uniform COLA is calculated by multiplying your years of service times the COLA factor. As of July 1, 2006, the COLA factor was $1.29. This amount may increase by no more than three percent of the previous year’s increase.
When applying for retirement, you may elect to receive an Optional COLA. To offset the cost of this annual adjustment, your benefit is reduced. The Optional COLA is up to three percent per year, as measured by the Consumer Price Index of Seattle, and takes effect in July after you have been retired for one full year.
To qualify for gain sharing you must first qualify for the Uniform COLA. When earnings for the state retirement fund average more than 10 percent over a four-year period, the portion over 10 percent is declared “extraordinary gains.” One-half of the extraordinary gains is used to increase retirement benefits. The four-year average is measured every two years, and if there are extraordinary gains, gain sharing benefits will be paid in January of even-numbered years. The base amount for the gain sharing benefit is computed by the State Actuary. The gain sharing amount is paid for each year of service credit earned. The gain sharing amount is added to the Uniform COLA base amount and used in the COLA calculation in July. (This increase will be reflected in the payment you receive on the last business day of July.)
Legislation passed in 2007 allows for a final gain sharing distribution on January 1, 2008, if the investment return criteria are met. At that point, the gain sharing benefit will be removed and replaced with other benefits.
Beginning July 1, 2009, TRS Plan 1 retirees will get a cost-of-living adjustment of 40 cents per month, for every year of service, minus any 2008 gain sharing increase to the COLA. This adjustment can not decrease the amount of the annual COLA, and it can not exceed 20 cents per month for each year of service.
This adjustment is intended as a replacement benefit for gain sharing. If the removal of gain sharing is found to be invalid, this adjustment amount would not be included in future annual increases.