Will my benefit increase?
Permanent Benefit Increase (PBI)
A PBI is a permanent benefit increase, commonly referred to as a cost-of-living adjustment or COLA. A PBI is payable to eligible retirees and beneficiaries on July 1, subject to TRSL Board recommendation and legislative approval, as long as there are sufficient funds in the TRSL Experience Account—an account that holds funds dedicated to PBIs.
NOTE: Act 184 of 2023 establishes a new method of funding PBIs. This new funding method (as described here) and the funding method outlined below will exist together. Upon payoff of TRSL's oldest debt schedule, known as the original amortization base (OAB), the funding method outlined below will be discontinued, and only the new funding method will remain. Act 184 also establishes new eligibility criteria for receiving a PBI under the new funding method.
PBI funding
The experience account is credited with up to 50% of TRSL's excess investment earnings, after the first $200 million of excess earnings have been applied to debt the state owes TRSL, also known as the unfunded accrued liability (UAL). The dollar amount dedicated to the UAL will increase based upon the increase in TRSL’s actuarial value of assets.
Experience account limit: If TRSL is less than 80% funded, the experience account can only be credited with enough funds to pay one PBI. If the retirement system is at least 80% funded, the experience account is eligible to hold funds sufficient to pay two PBIs.
Amount of PBI
The amount of a PBI is determined by the TRSL funding percentage and the Consumer Price Index for All Urban Consumers (CPI-U), an inflation indicator. 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.
PBIs are calculated only on the first $60,000 of the retiree’s annual retirement benefit. The $60,000 limit is increased each year in an amount equal to the increase in the CPI-U for the preceding year, if any.
PBI history
Permanent Benefit Increase (PBI)
A PBI is a permanent benefit increase, commonly referred to as a cost-of-living adjustment or COLA. A PBI is payable to eligible retirees and beneficiaries on July 1, subject to TRSL Board recommendation and legislative approval, as long as there are sufficient funds in the TRSL Experience Account—an account that holds funds dedicated to PBIs.
NOTE: Act 184 of 2023 establishes a new method of funding PBIs. This new funding method (as described here) and the funding method outlined below will exist together. Upon payoff of TRSL's oldest debt schedule, known as the original amortization base (OAB), the funding method outlined below will be discontinued, and only the new funding method will remain. Act 184 also establishes new eligibility criteria for receiving a PBI under the new funding method.
PBI funding
The experience account is credited with up to 50% of TRSL's excess investment earnings, after the first $200 million of excess earnings have been applied to debt the state owes TRSL, also known as the unfunded accrued liability (UAL). The dollar amount dedicated to the UAL will increase based upon the increase in TRSL’s actuarial value of assets.
Experience account limit: If TRSL is less than 80% funded, the experience account can only be credited with enough funds to pay one PBI. If the retirement system is at least 80% funded, the experience account is eligible to hold funds sufficient to pay two PBIs.
Amount of PBI
The amount of a PBI is determined by the TRSL funding percentage and the Consumer Price Index for All Urban Consumers (CPI-U), an inflation indicator. 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 Funding |
Last PBI Granted |
System earns actuarial rate of return that is: | ||
| At least 8.25% | Greater than AVR*, but not 8.25% | Less than or equal to AVR* |
||
| Less than 55% | N/A | None | None | None |
| At least 55%, but less than 65% |
None in preceding FY |
Lesser of 1.5% or CPI-U |
Lesser of 1.5% or CPI-U |
None |
| At least 65%, but less than 75% |
None in
preceding FY
|
Lesser of 2% or CPI-U |
Lesser of 2% or CPI-U |
None |
| At least 75%, but less than 80% |
None in preceding FY |
Lesser of 2.5% or CPI-U |
Lesser of 2% or CPI-U |
None |
| At least 80%, but less than 85% |
None in preceding FY |
Lesser of 3% or CPI-U |
Lesser of 2% or CPI-U |
Lesser of 2% or CPI-U |
| 85% or greater | N/A | Lesser of 3% or CPI-U |
Lesser of 2% or CPI-U |
Lesser of 2% or CPI-U |
| *Board-approved actuarial valuation rate (AVR). The AVR for TRSL is 7.25% for FY 2023. | ||||
Eligibility
The following requirements must be met on or before July 1 of the year the PBI is effective.
- Regular retiree: Must have received a benefit for at least one year and be 60 years of age
- Disability retiree: Must have been retired at least one year regardless of age
- Beneficiary of retired member: Retiree or beneficiary (or both combined) must have received a benefit for at least one year, and the deceased retiree would have been 60 years of age at the time the PBI is payable
- Survivor of non-retired member: Must have received a benefit for at least one year and the benefits must have originated from the service of a deceased member who would have been 60 years of age at the time the PBI is payable
PBIs are calculated only on the first $60,000 of the retiree’s annual retirement benefit. The $60,000 limit is increased each year in an amount equal to the increase in the CPI-U for the preceding year, if any.
PBI history
| TRSL BENEFIT INCREASES (since Fiscal Year 2006) | |||
| Fiscal Year |
Average TRSL Benefit (for Regular Retirees) |
COLA/PBI |
Average Monthly Benefit Increase |
| 2006 | $19,468 | None | NA |
| 2007 | $20,463 | 3.00% | $49 |
| 2008 | $21,375 | 3.00% | $51 |
| 2009 | $23,079 | Special* | $108 |
| 2010 | $23,477 | None | NA |
| 2011 | $23,863 | None | NA |
| 2012 | $24,300 | None | NA |
| 2013 | $24,522 | None | NA |
| 2014 | $25,218 | 1.50% | $29 |
| 2015 | $25,787 | None | NA |
| 2016 | $26,341 | 1.50% | $30 |
| 2017 | $26,548 | None | NA |
| 2018 | $26,757 | None | NA |
| 2019 | $26,966 | None | NA |
| 2020 | $27,160 | None | NA |
| 2021 | $27,378 | Special** | $130 |
| 2022 | $28,036 | 2.00% | $42 |
| 2023 | $28,224 | None | NA |
| *Act 144 of 2009 provided a special supplement of up to $300 per month only to those TRSL retirees and beneficiaries whose monthly TRSL benefit was less than $1,200. **Act 37 of 2021 provided a minimum benefit increase equal to the lesser of $300 or the difference between $1,450 and the annuitant’s current benefit for retirees, beneficiaries, and survivors meeting certain criteria on June 30, 2021. |
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