By Tom Moutes, RLACEI Legislative Director
We all feel it – gas prices skyrocketing, food prices rising, rents getting higher. Currently, we are seeing increases in the Consumer Price Index (CPI) unlike anything we have seen in the last 40 years! While I’m sure we will all appreciate the extra 3 percent COLA in our monthly checks starting in July, isn’t there more that can be done?
Most LACERS Retirees are well aware of the potential for up to a 3 percent annual Cost of Living Adjustment (COLA), with a “banking” for future years of increases in the CPI beyond the permitted 3 percent COLA. But, did you know that Section 4.1023 of the City Administrative Code allows the City Council to provide a discretionary COLA that goes beyond the 3 percent annual cap?
The good news is that, as frequently as every three years, the Council can grant a discretionary COLA above the annual amount that the LACERS Board adopts. Because inflation has been subdued for so long, the Council has not granted a discretionary COLA for many years.
The bad news is, despite the staggering inflation we have been dealing with lately, this probably is not the right time for the Council to adopt a discretionary COLA. The bad timing has to do with how the Administrative Code section is written. If I’m reading the section correctly and my math is accurate, the maximum discretionary COLA the Council could adopt right now is 0.45 percent. This is due to the three-year averaging that the Code requires. If the Council was to adopt the 0.45 percent now, it could not grant another discretionary COLA for at least three years.
However, if the inflation we are experiencing lasts throughout this calendar year, there is a good chance the discretionary COLA the Council could adopt next year could be significantly higher than 0.45 percent. I hope the Council will keep this possibility in mind next year. Stay tuned!