2016 military pension cost-of-living adjustments

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                       UI
               ADVISORY SYSTEM                                  CORRESPONDENCE SYMBOL
                                                                DUIO/OUI
          U.S. DEPARTMENT OF LABOR
                                                               DATE
             Washington, D.C. 20210
                                                                         December 31, 2015



ADVISORY:           UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 5-16

TO:                 STATE WORKFORCE AGENCIES

FROM:               ERIC SELEZNOW /s/ for PORTIA WU
                    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) and to provide the Department of Defense Web site where the
COLA information is located.

2. Background. COLAs are determined by the Bureau of Labor Statistics’ (BLS) Consumer Price
Index (CPI-W). It is based on the percentage increase of the CPI-W from the 3rd quarter of the
previous year versus the current year’s 3rd quarter (July, August, and September). 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 CPI-W there will be no increase in the COLA to Federal
civilian and military retirement annuities in 2016 due to a negative inflation rate. Retirees and
annuitants will not see a change to their payments for the 2016 calendar year. The attachment
specifies the COLA(s) for retired and retainer pay, survivor annuities, and premium determinations
effective December 1, 2015. For more information on the COLA(s) for the different retirees, visit the
Department of Defense website at: http://www.dfas.mil/retiredmilitary/newsevents/newsletter/Cost-
of-Living-Adjustment-for-2016.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, 2015.




 RESCISSIONS                                                   EXPIRATION DATE
 None                                                          Continuing

ATTACHMENT


  FISCAL YEAR 2016 ADJUSTMENTS TO RETIRED/RETAINER PAY, SURVIVOR
                       ANNUITIES AND PREMIUMS

The following Cost-of-Living Adjustments (COLAs) are effective December 1, 2015, based on
the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers
(CPI-W) through the third quarter calendar year 2015. 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:

       Retirement Effective:                 Percent Increase       10 U.S.C. Authority
       Before January 1, 2015                0.0 percent            1401a(b)(2)
       January 1 – December 31, 2015         0.0 percent            1401a(c) & 1401a(f)

    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, 2015                0.0 percent            1401a(b)(2)
       January 1 – March 31, 2015            0.0 percent            1401a(d) & 1401a(f)
       April 1 – June 30, 2015               0.0 percent            1401a(d) & 1401a(f)
       July 1 – September 30, 2015           0.0 percent            1401a(d) & 1401a(f)
       October 1, – December 31, 2015        0.0 percent            1401a(d) & 1401a(f)

    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, 2015                0.0 percent            1401a(e)
       January 1, – March 31, 2015           0.0 percent            1401a(e) & 1401a(f)
       April 1 – June 30, 2015               0.0 percent            1401a(e) & 1401a(f)
       July 1 – September 30, 2015           0.0 percent            1401a(e) & 1401a(f)
       October 1 – December 31, 2015         0.0 percent            1401a(e) & 1401a(f)

                                 COLAs for Survivor Annuities

4. Retired Serviceman’s Family Protection Plan annuities 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 NOT be increased.
   (reference: 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 NOT be increased. (reference: 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 NOT be increased.
   (reference: Public Law 100-456, section 653(c)).

7. Annuities for Certain Military Surviving Spouses (ACMSS) payable monthly under the
   provisions of section 644, Public Law 105-85, November 18, 1997, will NOT be
   increased and thus will remain $250.03.

                  Increase in the SBP Low-Cost Premium Threshold

8. Amounts with respect to which the 2.5 percent factor of the SBP premium (cost) formula
   apply for members who initially participated in the plan on or before December 1, 2015,
   will NOT be adjusted. (reference: 10 U.S.C. 1452 (a)(4)(B)).

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 1.3 percent effective
   January 1, 2016, from $776 to $786 (premium for this coverage will be $19.65 and the
   breakeven base amount will be $1684.29). However, these amounts could change if the
   Fiscal Year 2016 National Defense Authorization Act alters the expected military pay
   raise of 1.3 percent. (reference: 10 U.S.C. 1452(a)(4)(A)).