What is a PBI?

A PBI is a permanent benefit increase, formerly called cost-of-living adjustment or COLA. A PBI is payable to eligible retirees each year on July 1, subject to TRSL Board recommendation and legislative approval, as long as there are sufficient funds in the TRSL Experience Account. The experience account is funded with up to 50 percent of all TRSL investment earnings in excess of the actuarial rate of 8.25 percent, after the first $200 million of excess investment returns have been used to pay down retirement system debt.

The TRSL Board of Trustees may grant a PBI under the conditions outlined in the following table, and once the Legislature passes a concurrent resolution. The amount of a PBI is determined by the TRSL earnings rate and the Consumer Price Index for All Urban Consumers (CPI-U). A PBI will not be given if there is no increase in the CPI-U or when the balance in the experience account is not sufficient to fund a PBI.

TRSL Earnings	Amount of PBI
Less than 8.25 percent	If TRSL is less than 80 percent funded, no PBI will be granted. If TRSL is at least 80 percent funded, the PBI will equal 2.0 percent or the CPI-U, whichever is less.
At least 8.25 percent	The PBI will equal 3.0 percent or the CPI-U, whichever is less.

Eligibility
To qualify for a PBI, a retiree must have received a benefit for at least one year and be 60 years of age on or before July 1 of the year that the PBI is effective. Beneficiaries will receive a PBI if the retiree or beneficiary (or both combined) received a benefit for at least one year, and the retiree would have been 60 years of age. The age requirement does not apply to retirees receiving a disability benefit.

PBI amount limits
Any PBI shall be calculated only on the first seventy thousand dollars ($70,000) of the retiree’s annual retirement benefit, as originally established in the Experience Account law. The $70,000 limit is increased each year in an amount equal to the increase in the CPI-U for the preceding year, if any.