RMSTA Meetings: Positive Discussions
Editor’s Note: In case you missed the regional meetings with Mike Wood, here’s his recap of what happened.
As I travel around the state meeting with RMSTA meetings, the biggest concern that retirees have deals with the decision that the PSRS Board of Trustees made in regard to a cost of living adjustment (COLA).
As I talk to retirees about the necessary changes due to changes in the assumptions used by the actuary, it becomes obvious that the PSRS Board could not sit back and do nothing. Because the system cannot continue to assume that they will get an 8 percent return on investments and the fact that retirees are living longer, and drawing a benefit for a longer period of time, the PSRS Board had to make a very tough decision.
The PSRS Board needed to reduce the additional unfunded liability that was created by making the change in assumptions. The choices before them were to adjust the COLA or increase the contribution rate.
They ultimately make the difficult decision to change the policy dealing with the COLA, that would not allow for a COLA to be given if the consumer price index (CPI) was below 2 percent but would allow for a COLA of 2 percent in years when the CPI is between 2 percent and 5 percent. This would help the system while also allowing for a COLA increase in years when the CPI is larger.
The PSRS Board made their decision while looking long-term term viability of the system. It is difficult to know that current retirees will not receive a COLA this year, but it is good to know that the decision will help our system in the long term.
These meetings have also helped to reenergize our RMSTA membership. The potential for RMSTA is great.