Cost-of-Living Adjustment (COLA)
2017 Cost-of-Living Adjustment
The CPF Board of Trustees has approved a 0.3% cost-of-living adjustment (COLA) to the monthly pension benefit for beneficiaries of The Church Pension Fund Clergy Pension Plan, effective January 1, 2017.
Letter mailed to all Clergy Pension Plan beneficiaries December 12, 2016
We are pleased to announce that The Church Pension Fund Board of Trustees (CPF Board) has approved a 0.3% cost-of-living adjustment (COLA) to your monthly pension benefit, effective January 1, 2017. (Please note, if you retired during 2016, the increase is prorated.)
Although not required by plan rules, the CPF Board has generally granted a COLA when inflation has justified it and the financial condition of The Church Pension Fund Clergy Pension Plan has allowed for it. While we make our own judgments regarding COLAs, it has been our practice to look to the U.S. Bureau of Labor Statistics’ Consumer Price Index (CPI) as a benchmark to guide our thinking on inflation. Many other organizations, such as the Social Security Administration (SSA), look to the CPI when making decisions about COLAs. In October, the SSA announced a COLA of 0.3%. We realize the SSA’s COLA decision is not a perfect proxy for retiree living expenses in every case, but it is the most well recognized and objective measure available so we continue to see value in referring to it when making our decision.
Also, to assist retired clergy with the rising cost of healthcare, the CPF Board recently approved a 2017 subsidy increase of $10 per eligible member/per month1 for the Medicare Supplement Health Plans available through The Episcopal Church Medical Trust. The full subsidy for 2017 is $340.
Medicare-eligible retired clergy with 20 or more years of Credited Service, as such term is defined under the Clergy Pension Plan (Credited Service), and their eligible spouses will receive the full subsidy. Those with 10-19 years of Credited Service will receive a partial subsidy. Please visit www.cpg.org/medicare_supplement for details. The Medical Trust notified eligible retired clergy and beneficiaries of this enhancement in October, but if you have any questions, please call us at (800) 480-9967, Monday – Friday, 8:30AM – 8:00PM ET, excluding holidays.
We are fortunate to serve those who serve the Church and are grateful to be able to enhance your benefits. We wish you a blessed Advent season.
The Church Pension Fund Board of Trustees
CEO and President
The Church Pension Fund
1 The Church Pension Fund plans to continue to provide the Medicare Supplement subsidy. However, given the rising cost of medical care coupled with the uncertainty regarding the structure of Medicare in the future, this should not be viewed as a guarantee of the Medicare Supplement subsidy in perpetuity.
What We Consider When Determining COLA
Although not required by plan rules, the CPF Board has granted a COLA to beneficiaries of our defined benefit plans in years when the financial condition of the plans allowed for it. While we make our own decisions as to these increases, we have historically looked to the U.S. Bureau of Labor Statistics’ Consumer Price Index (CPI) as a benchmark to guide our thinking – a standard that many organizations, such as the Social Security Administration, look to when making decisions about cost of living increases.
The board also considers the funding status of each plan before making its annual COLA decision to ensure that the COLA decision is made in a manner that protects the long-term stability of the plans.