2013 military pension cost-of-living adjustments

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                  UI/UCX
               ADVISORY SYSTEM                             CORRESPONDENCE SYMBOL
          U.S. DEPARTMENT OF LABOR                         OUI/DUIO
             Washington, D.C. 20210                        DATE
                                                            February 20, 2013


ADVISORY:        UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 11-13

TO:              STATE WORKFORCE AGENCIES

FROM:            JANE OATES /s/
                 Assistant Secretary

SUBJECT:         Federal Military Pensions

1. Purpose. To ensure states 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 are effective December 1, 2012. Military retired pay, by
   law, is always rounded down to the next lower dollar amount. The term “retired pay”
   includes retainer pay.

3. COLA for Retired Pay. Based on the increase in the CPI, there are COLA adjustments for
   retired pay and Survivor Benefit Plan annuities effective December 1, 2012 (see attached).
   For more information on COLAs for the different types of retirees, visit the Department of
   Defense Web site at:
   http://www.dfas.mil/retiredmilitary/newsevents/newsletter/costoflivingadjustment.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. Fiscal Year 2013 Adjustments to Retired/Retainer Pay, Survivor Annuities and
   Premiums.




 RESCISSIONS                                              EXPIRATION DATE
 None                                                     January 1, 2014

Attachment 1 (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2013/UIPL_11_13_Att.pdf)

Attachment


         FISCAL YEAR 2013 ADJUSTMENTS TO RETIRED/RETAINER PAY,
                   SURVIVOR ANNUITIES AND PREMIUMS

The following Cost-of-Living Adjustments (COLAs) are effective December 1, 2012, based on
the increase in the Consumer Price Index for Urban Wage Earners and clerical Workers (CPI-W)
through the third quarter calendar year 2012. 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, 2012            1.7 percent                       1401a(b)(2)
January 1-December 31, 2012       1.7 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, 2012            1.7 percent                       1401a(b)(2)
January 1-March 31, 2012          1.7 percent                       1401a(d)
April 1-June 30, 2012             1.0 percent                       1401a(d)
July 1-September 30, 2012         0.2 percent                       1401a(d)
October 1-December 31, 2012       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 322 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, 2012            0.7 percent                       1401a(e)
January 1-March 31, 2012          0.7 percent                       1401a(e)
April 1-June 30, 2012             0.5 percent                       1401a(e)
July 1-September 30, 2012         0.0 percent                       1401a(e)
October 1-December 31, 2012       0.0 percent                       1401a(e)

4. Retired Serviceman’s Family Protection Plan annuities payable on December 1, 2012, 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 1.7 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 subchapter II or chapter 73, title 10, United States
   Code will be increased by the same percentage specified in paragraphs 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 1.7 percent (ref: section 653 (c),
   Public Law 100-456, section 653).

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 1.7
   percent from $238.17 to $242.22 effective December 1, 2012. (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, 2012, 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 1.7 percent effective January 1, 2013,
   from $747 to $760 (premium for this coverage will be $19.00 and the breakeven base amount
   will be $1,628.57). However, these amounts could change if the FY 2013 National Defense
   Authorization Act alters the expected military pay raise of 1.7 percent. (ref: 10 U.S.C.
   1452(a)(4)(A)).




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