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  1. #1
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    FRS - no COLA for years earned since 2011 - how do you compensate?

    https://www.myfrs.com/FRSPro_ComparePlan_Cost.htm

    "Each July 1 after retirement, Pension Plan members will earn a 3% COLA for all service prior to July 1, 2011. Any retirement service earned on or after July 1, 2011 will not be subject to a COLA.

    You will receive a fixed 3% cost-of-living increase on your June 30 monthly benefit amount (increase only applicable for FRS service earned prior to July 1, 2011). The increase does not include the Health Insurance Subsidy. Regardless of whether inflation is greater or less than 3%, your pre-July 1, 2011 benefit will still be adjusted by 3%."

    Doesn't look like there is any push in the legislature to restore the FRS pension COLA any time soon. The loss of the pension COLA means a loss of a lot of pension income, depending on lifespan. Anyone care to post how they are compensating for the lack of retirement COLA for the years earned after 2011? This is a big issue especially for the newer people.

  2. #2
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    Quote Originally Posted by Unregistered View Post
    https://www.myfrs.com/FRSPro_ComparePlan_Cost.htm

    "Each July 1 after retirement, Pension Plan members will earn a 3% COLA for all service prior to July 1, 2011. Any retirement service earned on or after July 1, 2011 will not be subject to a COLA.

    You will receive a fixed 3% cost-of-living increase on your June 30 monthly benefit amount (increase only applicable for FRS service earned prior to July 1, 2011). The increase does not include the Health Insurance Subsidy. Regardless of whether inflation is greater or less than 3%, your pre-July 1, 2011 benefit will still be adjusted by 3%."

    Doesn't look like there is any push in the legislature to restore the FRS pension COLA any time soon. The loss of the pension COLA means a loss of a lot of pension income, depending on lifespan. Anyone care to post how they are compensating for the lack of retirement COLA for the years earned after 2011? This is a big issue especially for the newer people.

    It’s called planning for retirement and putting money away dipshyt

  3. #3
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    Quote Originally Posted by Unregistered View Post
    It’s called planning for retirement and putting money away dipshyt
    Dip shit? I thought it was a worthy question. FRS got screwed up by the asshole governor we currently have and a few other dip shits who screwed with it to use our money elsewhere. How do you plan for it when they change it mid career ass hole. If your so smart why don’t we meet and talk about it face to face. I’d love to get your opinion in person.

  4. #4
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    I am the OP and I posted this question in order to gain some insight on how various deputies are dealing with the fact that the FRS pension is less generous due to the lack of pension COLA. If you have something helpful or useful to share, please do so. My intention was not to blame anyone or play politics but rather to offer some strategies which would help all, especially the newbies. How much to save and where, investments, and target amounts to offset the pension benefit reduction, etc.

  5. #5
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    I was hired in 1991. I was under the impression that people such as myself, would receive a reduced COLA that is based on some type of formula.

  6. #6
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    Formula and forget it

    Here is the formula explained:
    The COLA formula for retirees will be the sum of the pre-July 2011 service credit divided by the total service credit earned multiplied by 3 percent. Each Pension Plan member with an effective retirement date of Aug. 1, 2011, or after will have an individual COLA factor for his/her retirement. FRS Pension Plan members initially enrolled on or after July 1, 2011, will not have a COLA after retirement.
    So if you have no COLA your money becomes less and less due to inflation. You can save up all you want but new hires have to serve 30 years. That money is going to really fast if inflation goes up in the next 30 years. Which it will "DIPSHIT" Save all you want but if what you have at the end doesn't grow accordingly then you will be broke because your money keeps losing it''s value. We will never see that money again. Get ready for more chabges. Every year they introduce numerous bills to tweek the system to their liking.

  7. #7
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    LEO Affairs is not the place for intelligent thought or relevant discussion so don’t expect the morons who regularly post here to have the capacity to understand your legit question.

    One way to deal with this is deferred compensation. Set aside money now in a 457B plan that we have at the office and then you can start drawing down on that money when you retire and it will supplement your pension. While the COLA is not there your pension amount will be based on your high 5 so decreased value of your pension dollars will not begin to occur until you actually retire. Inflation this year is on;y about 1.6% and you can offset that with deferred comp or other investimnents. If inflation gets ridiculous in 30 years and becomes 3 or 4% then you got a problem but no prediction of that it is unlikely that you cannot make up for the inflation with income form other investments. Dont forget about DROP. No COLA but you leave with $300,000 cash, don’t blow it on boat and that investment income will generate more than enough to offset normal inflation. Places like CPD do not even have DROP so have to figure DROP money into the equation.

  8. #8
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    Quote Originally Posted by Unregistered View Post
    I was hired in 1991. I was under the impression that people such as myself, would receive a reduced COLA that is based on some type of formula.
    Your hire date is 1991 so you have 20 years from that time to 2011 @ 3% COLA earned. The years after 2011 do not have a pension COLA. Let's say you retire in 2021, then your pension would pay you a COLA for the 20 years ending in 2011 but the last 10 years would be straight pension with no COLA. You are probably looking at a pension COLA of 2% in this scenario. Unless the legislature changes something.

  9. #9
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    Quote Originally Posted by Unregistered View Post
    Here is the formula explained:
    The COLA formula for retirees will be the sum of the pre-July 2011 service credit divided by the total service credit earned multiplied by 3 percent. Each Pension Plan member with an effective retirement date of Aug. 1, 2011, or after will have an individual COLA factor for his/her retirement. FRS Pension Plan members initially enrolled on or after July 1, 2011, will not have a COLA after retirement.
    So if you have no COLA your money becomes less and less due to inflation. You can save up all you want but new hires have to serve 30 years. That money is going to really fast if inflation goes up in the next 30 years. Which it will "DIPSHIT" Save all you want but if what you have at the end doesn't grow accordingly then you will be broke because your money keeps losing it''s value. We will never see that money again. Get ready for more chabges. Every year they introduce numerous bills to tweek the system to their liking.
    Thanks for the formula. Let me add a bit to the savings part:

    Since the pension will have a small or no COLA, personal savings will be paramount. Plan for around $500k to $1 million depending on your lifestyle. Max out your deferred comp if you can. Make sure your house is paid off when you retire. Don't buy a big azz boat or a $50k truck or a 2nd house in North Carolina because you will never save the money to get you through retirement. If the kids need cars or college money, tell them to work for it. They have a whole lifetime of work to pay it off, you don't. Equally important, the investment returns you earn must be above the inflation rate. The only way to get inflation beating returns so your money grows is to invest in stock funds. "Safe" investments will not get you there. The importance of personal savings cannot be emphasized enough.

  10. #10
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    Quote Originally Posted by Unregistered View Post
    Thanks for the formula. Let me add a bit to the savings part:

    Since the pension will have a small or no COLA, personal savings will be paramount. Plan for around $500k to $1 million depending on your lifestyle. Max out your deferred comp if you can. Make sure your house is paid off when you retire. Don't buy a big azz boat or a $50k truck or a 2nd house in North Carolina because you will never save the money to get you through retirement. If the kids need cars or college money, tell them to work for it. They have a whole lifetime of work to pay it off, you don't. Equally important, the investment returns you earn must be above the inflation rate. The only way to get inflation beating returns so your money grows is to invest in stock funds. "Safe" investments will not get you there. The importance of personal savings cannot be emphasized enough.

    Without a COLA, your pension will be eroded very quickly, look at your final pay stub or W2 from 10 or 15 years ago. Now imagine your salary NEVER increased, that's what you will be dealing with.

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