Are the annuity adjustments a Cost of Living Adjustment (COLA) for retirees?
No. Some retirement systems guarantee annual increases of a set amount, 2% or 3%, for example, to help combat the effects of inflation. Other systems offer nothing, and rely on special legislation to provide periodic post-retirement increases. The WRS does not guarantee an annual increase – the system instead relies on investment performance to determine annual adjustments. Participants and employers share the risk. Good returns mean lower employer and employee contributions and the granting of post-retirement increases. Conversely, poor returns can mean higher contributions and lower (or none, or negative) post-retirement adjustments. In short, if the market does well, retirees see an increase; if it does poorly, decreases are possible.
