§ 21337 Retiree Purchasing Power Adjustments

Key Takeaways

•The state gives extra money every year to help retired workers and their families keep up with rising prices.
•The extra money can't make their monthly checks more than 75% of what they could buy when they first retired.
•The extra money comes from either what's needed to reach 75% or 1.1% of what workers paid in, whichever is smaller.
•Any leftover money goes back to the state or school employers.

Example

A retired teacher gets a monthly check of $2,000. Over time, prices go up, so $2,000 buys less stuff.

The state will add extra money to the teacher's check so they can buy almost as much as they could when they first retired, but not more than 75% of what $2,000 could buy back then.

(a) On an annual basis, the board shall transfer funds to separate supplemental state and school accounts, to fund the purchasing power protection allowance of retirees, survivors, and beneficiaries of state or school employers, respectively. The amounts transferred shall be the lesser of the following: (1) The amount necessary to increase all monthly allowances paid by this system to retirees, survivors, and beneficiaries of state or school employers to 75 percent of the purchasing power of the initial monthly allowances. (2) One and one-tenth percent of state or school member contributions, as determined by Section 20178. (b) The funds transferred to the two separate supplemental accounts shall be utilized to increase all monthly allowances paid by this system to retirees, survivors, and beneficiaries of state and school employers, up to a maximum of 75 percent of the purchasing power, as determined by the board, of the initial monthly allowances, notwithstanding the benefit provided by Section 21328, that were received by every retired state or school member or survivor or beneficiary of a state or school member or retiree who was eligible to receive any allowance at the end of each fiscal year. Funds remaining in the state or school account after the payment of benefits under this section shall be transferred to the respective state or school employer accounts. (c) Annual adjustments in the purchasing power protection allowance shall be effective with the monthly allowance regularly payable on the first day of May, provided that in the first year after enactment of the act adding this subdivision, the purchasing power protection allowance adjustment to the monthly allowance payable on the first day of May shall also reflect an adjustment for the period from January 1 through April 30. The board shall implement the provisions of this subdivision on or before January 1, 2012, unless the board determines that the implementation tasks cannot be completed until a later date, in which case, the board shall be prepared to implement the provisions of this section no later than July 1, 2013. (Amended by Stats. 2017, Ch. 241, Sec. 9. (SB 525) Effective January 1, 2018.)

Key Takeaways

•The state gives extra money every year to help retired workers and their families keep up with rising prices.
•The extra money can't make their monthly checks more than 75% of what they could buy when they first retired.
•The extra money comes from either what's needed to reach 75% or 1.1% of what workers paid in, whichever is smaller.
•Any leftover money goes back to the state or school employers.

Example

A retired teacher gets a monthly check of $2,000. Over time, prices go up, so $2,000 buys less stuff.

The state will add extra money to the teacher's check so they can buy almost as much as they could when they first retired, but not more than 75% of what $2,000 could buy back then.

Key Takeaways

Example

Key Terms

References

§ 21337 Retiree Purchasing Power Adjustments

Key Takeaways

Example

Key Terms

References

Key Takeaways

Example

Key Terms

Related Statutes

References

Key Takeaways

Example

Key Terms

Related Statutes

References