Can my annual benefit adjustment be reduced or eliminated?
State law provides for an automatic annual benefit adjustment of 2 percent of the initial monthly benefit, after the benefit recipient has been receiving a benefit for at least one year. The payment of this annual benefit adjustment is not tied to changes in the cost of living; it is made whether the cost of living increases or decreases.
Unlike other provisions of law, however, this provision specifically allows the Legislature to adjust the amount of the annual benefit adjustment as economic conditions dictate.
What this means is the Legislature could pass a bill that reduces or eliminates the 2 percent annual benefit adjustment, not only for new members, but for existing members, even if they have already retired.