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Inflation has increased noticeably over recent years. Why did I receive a 2.5 percent increase when inflation was higher?

April 26, 2017increase increased inflation noticeably recent

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Inflation has increased noticeably over recent years. Why did I receive a 2.5 percent increase when inflation was higher?

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Under state law, the inflation component of the annual Post Fund adjustment is capped at 2.5 percent annually, even if inflation is higher. Actual CPI-W (consumer price index for urban wage earners and clerical employees) is paid when inflation is less than 2.5 percent. For example, if CPI-W inflation is only 1.25 percent during a particular year, the inflation component would only be 1.25 percent for the adjustment the following January 1. It is also possible for CPI-W inflation to be zero or even negative (deflation) during a fiscal year. If either of these situations occurs, there would be no inflation-based component for the following January 1 adjustment.