Why is the retiree COLA 80% of the CPI?

The annual cola amount for MSEP 2000 is calculated as follows - MOSERS COLA rate = 80% of the percentage increase in the average CPI-U from the one year to the next. Is there a reason for the 80% instead of 100% or some other percent other than that is what the statute prescribes? Thanks

 You are correct that Missouri state statute stipulates how cost-of-living adjustments (COLAs) will be calculated and that is the process we follow at MOSERS.

(For members of MSEP, see: Chapter 104.415; for members of MSEP 2000, see: Chapter 104.1045.)

In general, the statutes say COLAs will be based on 80% of the percentage increase in the average CPI from one year to the next. (There are some exceptions.)

COLAs are a tremendously valuable part of the benefits our members receive because they help members cope with inflation as the prices of goods and services increase during their retirement years. The 2019 COLAs will be announced in January 2019. Last January, we posted information about the 2018 COLAs.

Setting the COLA, like all the other MOSERS benefit provisions, is a General Assembly policy decision.

Changing how COLAs are calculated to something like 100% of the increase in the CPI would have significant cost implications (increasing employer contributions by several million dollars per year).