COLA for Fairfax County Retirees and DROP Members
2016 COLA News
Cost of Living Adjustments (COLAs) for retirees and DROP participants in the Employees', Police Officers and Uniformed Retirement Systems, in the amount of 1.3%, will be effective July 1, 2017.
Each year, effective July 1, retiree benefits are increased by a
cost-of-living adjustment (COLA) based on the increase in the Washington
area Consumer Price Index (CPI-U) for the twelve months ending March 31.
This "automatic" COLA is equal to the CPI increase up to a
maximum of 4.0%. The increase in the CPI for the twelve months ending
March 31, 2017 is 1.3%.
The CPI, as defined by the United States Bureau of Labor Statistics, is comprised of several categories within an overall 'market basket.' While the overall CPI increased by 1.3% over the past year, the various component category varied.
The Board of Trustees, subject to the availability of an "actuarial surplus" as defined in the Fairfax County Code, may grant an additional COLA of up to 1.0%. This COLA is in addition to the automatic COLA governed by the CPI-U. On September 28, 2010, the Board of Supervisors amended the Code to redefine "available actuarial surplus" to mean when the System's actuarial value of assets exceeds the actuarial accrued liability as reported in the latest actuarial valuation report.
The July 1, 2016 actuarial valuation indicates that there is no available actuarial surplus. As a result, under the terms of the current ordinance, the Board of Trustees does not have the authority to grant any additional COLA this year. The retiree COLA effective July 1, 2017 will be 1.3%.
For members who have retired or entered DROP during the current fiscal year, COLAs are prorated as shown below according to the effective dates of retirement or DROP entry:
- July 2, 2016 and October 1, 2016 ......75% of the COLA amount
- October 2, 2016 and January 1, 2017 ......50%
- January 2, 2017 and April 1, 2017............25%
- After April 1, 2017 ...............................0% COLA