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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 399 of 2014 changed how PBIs are funded and PBI amounts are determined.

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 85% 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 
at least 8.25%
System
earns ARR*, 
but not 8.25%
System does 
not earn ARR*
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
*Actuarially Realized Rate of Return (ARR). The ARR for TRSL is 7.75%.


















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 retiree: 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 (non-retiree beneficiary): 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
PBI amount limits 
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.