2016 military pension cost-of-living increase

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                   UI
               ADVISORY SYSTEM                              CORRESPONDENCE SYMBOL
                                                            DUIO/OUI
          U.S. DEPARTMENT OF LABOR
                                                            DATE
             Washington, D.C. 20210                         January 3, 2017


ADVISORY:          UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 8-17

TO:                STATE WORKFORCE AGENCIES

FROM:              PORTIA WU /s/
                   Assistant Secretary

SUBJECT:           Federal Military Pensions

1. Purpose. To ensure State Workforce Agencies are aware of the Federal military retired pay
annual cost of living adjustment (COLA) provided by the Department of Defense.

2. Background. The military COLA is based on the previous year’s Consumer Price Index
(CPI). Military COLA increases became effective December 1, 2016. Military retired pay, by
law, is always rounded down to the next lower dollar amount. The term “retired pay” includes
retainer pay and the term “member” includes former members of the Uniformed Services.

3. COLA for Retired Pay. Based on the increase in the CPI, there are COLA adjustments for
retired pay, survivor annuities, and Survivor Benefit Plan premiums effective December 1, 2016
(see attached). For more information on COLAs for the different retirees, visit the Department
of Defense website at:
https://www.dfas.mil/retiredmilitary/newsevents/newsletter/2017costoflivingadjustment.html.

4. Instructions. States with laws that require a reduction of the unemployment insurance
weekly benefit amount by the prorated weekly amount of retired pay and pensions should
identify claimants affected by the COLA increases and make the appropriate reductions as
required by state law.

5. Action Requested. State Administrators are requested to provide the above information and
attachment to appropriate staff.

6. Inquiries. Please direct all inquiries to the appropriate Regional Office.

7. Attachment. Adjustment to Retired/Retainer Pay, Survivor Annuities and Premiums,
Effective December 1, 2016.


 RESCISSIONS                                                EXPIRATION DATE
 None                                                       January 1, 2018

Attachment (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2017/UIPL_08-17_Attachment_Acc.pdf)

ATTACHMENT


  FISCAL YEAR 2017 ADJUSTMENTS TO RETIRED/RETAINER PAY, SURVIVOR
                       ANNUITIES AND PREMIUMS

The following Cost-of-Living Adjustments (COLAs) are effective December 1, 2016, based on
the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers
(CPI-W) through the third quarter of calendar year 2016. The term “retired pay” includes
retainer pay and the term “members” includes former members of the Uniformed Services.

                                    COLAs for Retired Pay

    1. The retired pay COLA for those who first became a member of a Uniformed Service
      before September 8, 1980, is specified according to the effective date of their retirement,
      as follows:

       Retired Pay Based on
       Rates of Pay Effective:               Percent Increase       10 U.S.C. Authority
       Before January 1, 2016                0.3 percent            1401a(b)(2)
       January 1 – December 31, 2016         0.3 percent            1401a(c)

    2. The retired pay COLA for those who first became a member of a Uniformed Service on
      or after September 8, 1980, is specified according to the effective date of their retirement,
      as follows:

       Retirement Effective:                 Percent Increase       10 U.S.C. Authority
       Before January 1, 2016                0.3 percent            1401a(b)(2)
       January 1 – March 31, 2016            0.3 percent            1401a(d)
       April 1 – June 30, 2016               0.3 percent            1401a(d)
       July 1 – September 30, 2016           0.3 percent            1401a(d)
       October 1, – December 31, 2016        0.0 percent            1401a(d)

    3. The retired pay COLA for those who first became a member of a Uniformed Service on
      or after August 1, 1986, and also elected to receive a career status bonus under the
      provisions of section 354 of title 37 United States Code is specified according to the date
      of their retirement, as follows:

       Retirement Effective:                 Percent Increase       10 U.S.C. Authority
       Before January 1, 2016                0.3 percent            1401a(e)
       January 1, – March 31, 2016           0.3 percent            1401a(e)
       April 1 – June 30, 2016               0.3 percent            1401a(e)
       July 1 – September 30, 2016           0.0 percent            1401a(e)
       October 1 – December 31, 2016         0.0 percent            1401a(e)

                               COLAs for Survivor Annuities

4. Retired Serviceman’s Family Protection Plan annuities payable on December 1, 2016,
   under the provisions of subchapter I of chapter 73, title 10, United States Code, to the
   spouse or child of a member who died on or before March 20, 1974 will be increased by
   0.3 percent (ref: 10 U.S.C. 1434 (e)).

5. Annuities under the Survivor Benefit Plan (SBP) and Reserve Component Survivor
   Benefit Plan (RCSBP) under the provisions of the subchapter II of chapter 73, title 10,
   United States Code will be increased by the same percentage specified in the line of
   paragraph 1, 2, or 3 above by which the retired pay of the person providing the annuity
   would have been increased at such time if the person were alive and otherwise entitled to
   such pay. (ref: 10 U.S.C. 1451 (g)).

6. COLAs for supplemental annuities paid to certain low income widows of members who
   were deceased before November 1, 1953 will be increased 0.3 percent (ref: Public Law
   100-456, section 653(c), Sept. 29, 1988).

7. Annuities for Certain Military Surviving Spouses (ACMSS) payable monthly under the
   provisions of section 644, Public Law 105-85, November 18, 1997, will be increased 0.3
   percent from $250.03 to $250.78 effective December 1, 2016. (ref: P.L. 105-85, sec
   644).

                 Increase in the SBP Low-Cost Premium Threshold

8. Previous amounts with respect to which the 2.5 percent factor of the SBP premium (cost)
   formula apply will be adjusted effective December 1, 2016, in conjunction with the
   adjustments in retired pay made under the provisions of section 1401a of title 10, United
   States Code (ref: 10 U.S.C. 1452(a)(4)(B)). The Defense Finance and Accounting
   Service will perform necessary calculations to determine actual premiums based on the
   individual circumstances of each case.

9. The amount with respect to which the 2.5 percent factor of the SBP premium (cost) is
   applied for participation upon retirement will be increased 1.6 percent effective
   January 1, 2017, from $786 to $799 (premium for this coverage will be $19.98 and the
   breakeven base amount will be $1,712.15). However, these amounts could change if the
   Fiscal Year 2017 National Defense Authorization Act alters the expected military pay
   raise of 1.6 percent. (ref: 10 U.S.C. 1452(a)(4)(A)).