The Kentucky Retired Teachers Association (KRTA) has released a tool for current and retired teachers to calculate the financial impact of Gov. Matt Bevin’s proposed pension cost-of-living adjustment (COLA) freeze. As part of pension reform, Bevin has called for suspending retired teachers’ annual 1.5 percent cost-of-living-adjustment (COLA) for a five years.
The new COLA Suspension Calculator allows teachers to understand exactly how much money they will lose as a result of Gov. Bevin’s proposed five year COLA freeze. For example, a 60-year old retired teacher receiving a $3,000 per month would lose over $71,000 over their lifetime if the COLA were suspended for five years.
Teacher COLAs are pre-funded, with an active teacher contributing 1.74 percent of each paycheck to pay for their retirement COLA. KRTA believes that a COLA suspension would be in violation of the inviolable contract and should be removed from the reform debate because it robs teachers of what they have already paid.
Tim Abrams, incoming executive director of KRTA, says that this new calculator will help retired teachers understand the full financial impact of a COLA freeze. “We also hope that armed with this information, more retired teaches will get involved in the pension reform debate and contact their lawmakers,” Abrams said.
“The tool is easy to use,” Abrams explained. “Current and retired teachers will know precisely how much money they will lose by answering a few simple questions – their age, date of retirement, and current monthly annuity. A COLA may not seem like a large amount upfront, but over time those missing adjustments can mean teachers lose tens of thousands of dollars in retirement. And we know every single dollar matters to our retirees.”
For more information on Gov. Bevin’s proposed COLA cuts and to download the COLA Suspension Calculator, please visit www.teachfrankfort.org/changes-cost-living-adjustments-colas-calculator.