IS THE EMPLOYEE ELIGIBLE FOR POST-RETIREMENT COST-OF-LIVING INCREASES?
If the answer is yes, what has been the average historical percentage increase per year. If you answer YES and do not indicate the percentage, we will assume a rate equal to 60% of the increase in the Consumer Price Index for the year prior to the Date of Valuation. A cost-of-living adjustment is an incremental increase in an individual’s monthly retirement benefit, granted to keep the retiree’s benefits in line with inflation. This should not be confused with a cost-of-living adjustment (a raise) granted to an employee before retirement. When employed in a present value analysis, a COLA lowers the interest rate assumption(s). Interest rates and present value have an inverse relationship. Therefore, a lower interest rate results in a higher present value. WILL THE EMPLOYEE RECEIVE SOCIAL SECURITY FOR THE YEARS OF PLAN PARTICIPATION? Most people who work for a private company pay into Social Security and will therefore be entitled to receive Social Security benefits when they retire. If
