2014 military pension cost-of-living adjustments

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                   UCX
               ADVISORY SYSTEM                              CORRESPONDENCE SYMBOL
                                                            OUI/DUIO
          U.S. DEPARTMENT OF LABOR
                                                            DATE
             Washington, D.C. 20210                          January 16, 2014



ADVISORY:          UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 4-14

TO:                STATE WORKFORCE AGENCIES

FROM:              ERIC M. SELEZNOW /s/
                   Acting 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 will be effective December 1, 2013. 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.

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, 2013 (see attached). For
more information on COLAs for the different retirees, visit the Department of Defense website
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 2014 Adjustments to Retired/Retainer Pay, Survivor Annuities and
Premiums.




 RESCISSIONS                                               EXPIRATION DATE
 None                                                      January 1, 2015

Attachment 1 (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2014/UIPL_4_14.pdf)

Attachment

FISCAL YEAR 2014 ADJUSTMENTS TO RETIRED/RETAINER PAY, SURVIVOR
ANNUITIES AND PREMIUMS

The following Cost-of-Living Adjustments (COLAs) are effective December 1, 2013, based on
the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers
(CPI-W) through the third quarter calendar year 2013. The term “retired pay” includes retainer
pay and the term “members” includes former 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, 2013 1.5 percent 1401a(b)(2)
January 1 — December 31, 2013 1.5 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, 2013 1.5 percent 1401a(b)(2)
January 1 — March 31, 2013 1.5 percent 1401a(d)

April 1 — June 30, 2013 0.9 percent 1401a(d)

July 1 — September 30, 2013 0.4 percent 1401a(d)

October 1, — December 31, 2013 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, 2013 0.5 percent 1401a(e)
January 1 — March 31, 2013 0.5 percent 1401a(e)
April 1 — June 30, 2013 0.4 percent 1401a(e)
July 1 — September 30, 2013 0.0 percent 1401a(e)

October 1 — December 31, 2013 0.0 percent 1401a(e)

COLAs for Survivor Annuities

4. Retired Serviceman’s Family Protection Plan annuities payable on December 1, 2013,
under the provisions of subchapter I of chapter 73, title 10, U.S.C., to the spouse or child
of a member who died on or before March 20, 1974 will be increased by 1.5 percent (ref:
10 U.S.C. 1434 (e)).

5. Annuities under the Survivor Benefit Plan (SBP) and Reserve Component Survivor
Benefit Plan under the provisions of subchapter II of chapter 73, title 10, U.S.C., 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 1.5 percent (ref: section 653
(c), Public Law 100-456, section 653).

7. Annuities for Certain Military Surviving Spouses payable monthly under the provisions
of section 644, Public Law 105-85, November 18, 1997, will be increased 1.5 percent
from $242.22 to $245.85 effective December 1, 2013 (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, 2013, in conjunction with the
adjustments in retired pay made under the provisions of section 1401a of title 10, U.S.C.
(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 1.0 percent effective
January 1, 2014, from $760 to $768 (premium for this coverage will be $19.20 and the
breakeven base amount will be $1,645.72). However, these amounts could change if the
Fiscal Year 2014 National Defense Authorization Act alters the expected military pay
raise of 1.0 percent. (ref: 10 U.S.C. 1452(a)(4)(A)).