Cost-of-Living Adjustments

PURPOSE: This rule provides for the implementation of costof-living adjustments to retired members and beneficiaries as provided in section 169.670, RSMo. (1) The board of trustees, at the August meeting or as soon as sufficient data is available after the end of the fiscal year, shall determine any cost-of-living adjustment to be effective with the January payment following the close of the fiscal year. The board shall consider the recommendation of the system’s actuary in determining the amount of adjustment to be made. (2) The recommendation of the actuary and the determination of the board shall take into consideration data from the National Consumer Price Index (CPI) and may include other pertinent data available. The cost-of-living change in the CPI shall be the June CPI of the fiscal year divided by the June CPI of the preceding fiscal year minus one (1) and expressed as a percent. Example: June 1976 CPI, 170.1; June 1975 CPI, 160.6 (170.1 ÷160.6) - 1 = .059 = 5.9%. (3) When it is determined that an increase shall be granted, the increase shall be added to the allowances of all persons receiving service or disability retirement allowances or beneficiary allowances under the provisions of sections 169.663 and 169.670, RSMo. The initial increase in a retired member’s allowance cannot be granted before January 1, 1982, or until the fourth January 1 following retirement, whichever is later. A designated beneficiary of a deceased retiree who is receiving an allowance as provided in section 169.670, RSMo will be eligible for an increase provided the deceased retiree would have been retired four (4) January firsts had s/he lived. (4) If the cost-of-living decreases as determined by the board of trustees, the allowance which had previously been increased under the provisions of Senate Bill 242 may be decreased by a percentage not to exceed the percent of reduction in the cost-of-living as determined by the board, but the decrease or total of such decreases shall not reduce the allowance below that received at retirement or on December 31, 1981, whichever is later. In determining whether a decrease shall be made, consideration shall be given not only to cost-of-living data as shown by the National CPI for the preceding fiscal year, but also to the total net economic change as reflected by the National CPIs of all years since the retiree or eligible beneficiary under sections 169.663 and 169.670, RSMo first qualified for a cost-ofliving increase. AUTHORITY: section 169.610, RSMo 1994.* Original rule filed Sept. 11, 1981, effective Dec. 11, 1981. Amended: Filed Aug. 9, 1999, effective Feb. 29, 2000. *Original authority: 169.610, RSMo 1965, amended 1977.