Issue link: http://digital.copcomm.com/i/1067015
X X Retirement Planning 17 It's Time for a COLA By Laura Ladd, Chair of the Wyoming Retirement System Board It has been ten years since retired members of the Wyoming Retirement System (excluding members of Paid Firefi ghter Plan A) were awarded a cost of living adjustment (COLA). During this time we have seen infl ation rise, placing undue pressure on some of the most vulnerable of our population, elderly retirees dependent upon a fi xed income to meet their day to day needs. The average monthly benefi t for retirees of the Public Employee Plan was $1,187 in 2008 and after ten years of purchasing power erosion, that buys about $248 less.1 The Wyoming Retirement System (WRS) paid some amount of COLA each year between 1998 and 2008, which led to many members with the expectation of an annual COLA as a regular part of pension benefi ts in retirement. When COLAs stopped at the time of the Great Recession of 2008, many people were caught off guard. With the recovery in the markets, many retirees have asked why COLAs have not resumed. For background, the Board no longer has the authority to independently award COLAs. State law passed in 2012 both returned that role to the Legislature and set stringent criteria for granting a COLA to ensure the solvency of the funds. Under this criteria, actuarial projections show there won't be suffi cient funding from internal pension assets to provide for a COLA for several decades. This does not mean the Board does not bear responsibility, but it does mean that any potential solution for this problem must be supported by the legislative and executive branches as well. Especially since the change in the law, WRS has made a concerted eff ort to educate currently employed members that retirement security is a shared responsibility. Supplemental savings need to be a cornerstone of retirement planning. It is no longer feasible for our members to rely entirely upon a WRS-funded COLA to off set the impacts of infl ation. This positions us to consider a joint approach to planning for infl ation, one that includes a personal responsibility as well as some support through COLAs. To that end, WRS developed a tool which allows active members to build an infl ation adjusted component into their retirement benefi t. In November, the WRS Board, recognizing the severity of this issue and its compounding eff ect, passed a resolution supporting education and advocacy for a COLA. Wyoming needs to have policy discussions regarding the impacts to Wyoming retirees and the future of potential funding solutions for infl ation through a COLA. The Coalition for a Healthy Retirement is comprised of WRS pension plan stakeholders, including the Wyoming Education Association, Wyoming Public Employees Association, Federated Firefi ghters of Wyoming, Wyoming Retired Educational Personnel, AARP Wyoming and the Equality State Policy Center. It is taking the lead on bringing this discussion about and telling the stories of our retirees. No one is better 1 This is according to the Wyoming Cost of Living Index which shows infl ation over the last ten years totaled 20.9 percent. positioned to impact this discussion than you, active and retired members of WRS. Please consider contacting the Coalition for a Healthy Retirement if you'd like to learn more and get involved. I am incredibly proud of how Wyoming's pensions have fared even during tough times. We've had to make tough choices, including benefi t adjustments, as well as contribution increases for current employees and employers. This along with our eff orts to enhance our long-term investment performance means the Wyoming Retirement