Cost-of-Living Adjustment (COLA)
2017 Cost-of-Living Adjustment
The CPF Board has determined there will not be a cost-of-living increase (COLA) for beneficiaries of The Episcopal Church Lay Employees’ Retirement Plan (Lay DB Plan) in 2017.
Letter mailed to all Lay DB beneficiaries December 12, 2016
We are writing on behalf of The Church Pension Fund Board of Trustees (CPF Board) to inform you that there will be no cost-of-living adjustment (COLA) for participants and beneficiaries of The Episcopal Church Lay Employees’ Retirement Plan (Lay DB Plan) for 2017.
As in prior years, the CPF Board referred to its current COLA policy only to consider granting a COLA when a defined benefit pension plan is fully funded. As of September 30, 2016, the Lay DB Plan was not fully funded.
We hope you understand that the decision not to grant a COLA for 2017 protects the long-term viability of the Lay DB Plan and the continuity of pension payments participants and beneficiaries receive.
This decision does not affect how the pension payments participants receive under the Lay DB Plan are calculated.
We hope this letter provides you with a clearer understanding of the CPF Board’s decision. As always, if you have any questions or comments, please do not hesitate to call us at (866) 802- 6333, Monday – Friday, 8:30AM – 8:00PM ET, excluding holidays. We wish you a blessed Advent season.
The Church Pension Fund Board of Trustees
CEO and President
The Church Pension Fund
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.
The Lay Defined Benefit Plan is a qualified plan under Section 401(a) of the Internal Revenue Code, but as a church plan, it is not subject to ERISA. The plan's financial condition is disclosed in the Church Pension Group Annual Report.
The Church Pension Fund, as sponsor of this plan, continues to monitor the funding status closely. Like many defined benefit plans, the Lay Defined Benefit Plan currently is not fully funded. The Church Pension Fund retains the right to amend, terminate or modify the terms of the Lay Defined Benefit Plan, including the employer assessment rate, without notice and for any reason.