The PSRS/PEERS Board of Trustees convened on October 28, 2024 to discuss a key item on the agenda: a Cost-of-Living Adjustment (COLA) for eligible retirees. The Board has voted to provide a 2% COLA for eligible benefit recipients, effective January 1, 2025.
This decision reflects the commitment to ensuring financial stability and security for our retirees. COLAs are vital in preserving the purchasing power of retirees’ fixed incomes, especially in the face of inflation. The Missouri Retired Teachers Association (MRTA) has a long-standing history of advocating for COLAs and will continue to push for the restoration of the pre-2016 COLA policy.
Under the current PSRS/PEERS COLA policy, the adjustments are as follows: • 0% COLA when the CPI-U is less than 2% • 2% COLA when the cumulative CPI-U reaches 2% or more • 2% COLA when the CPI-U is between 2% and 5% • 5% COLA when the CPI-U is 5% or more
The Consumer Price Index for All Urban Consumers (CPI-U) as of June 30, 2024, was 2.9714%. According to this policy, retirees who qualify will receive a 2% COLA beginning in January 2025. This increase will help ensure that our retirees can maintain their financial security.
Why COLAs Matter for Retirees: Protection Against Inflation As prices for goods and services rise, the value of money decreases. For retirees on fixed incomes, this can make it harder to afford essentials. COLAs adjust benefits to keep pace with these rising costs.
Preserving Standard of Living Without COLAs, retirees risk a declining standard of living, as their income won’t stretch as far. COLAs help ensure retirees can continue to afford necessities such as housing, food, healthcare, and utilities.
Addressing Rising Healthcare and Long-Term Care Costs Healthcare costs, including long-term care, often rise faster than general inflation. COLAs help retirees manage these increasing expenses, which are more common in retirement.
Combating Longevity Risk Missouri retirees are living longer, which means they need their retirement income value to keep up with inflation. COLAs help prevent the erosion of income value, ensuring retirees’ financial security over many years.
MRTA Continues to Fight for Retirees MRTA remains dedicated to advocating for retirees and will continue to support efforts to restore the previous COLA policy, which provided even greater protection against inflation.
Since October 2023, MRTA has been working on legislation to increase the 80% cap for our most vulnerable seniors. Two consecutive years of a 5% COLAs have resulted in some retirees becoming “COLA capped.” The total lifetime COLA cannot exceed 80% of a retiree’s original benefit. According to Missouri state statues, when a retiree reaches this 80% cap, they are no longer eligible to receive COLAs. This is an issue that MRTA has started to research and consider more than we have in the past.
While we do expect the consumer price index to return to more normal patterns in the future, this cap can be detrimental for those who have been retired for many years and are our most vulnerable retirees.
We thank you for your ongoing membership in MRTA. If you haven’t yet renewed for 2025, please do so now to continue supporting our mission.
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