§ 22140 Retirement Benefit Annual Increase

Key Takeaways

•Retired people get a 2% raise in their monthly pension every year on September 1, starting one year after they retire.
•This raise doesn’t stack up year after year—it’s just a simple 2% added each time.
•The raise only applies to the main pension, not to extra money from special accounts like tax-sheltered annuities.
•If workers stop paying extra into the pension fund, the government can change the raise amount, but they can’t take away what retirees already earned.

Example

A teacher retires and starts getting $3,000 a month from their pension.

After one year, they get a 2% raise, so their new monthly pension becomes $3,060. This happens every September 1, but it’s always just 2% of their original $3,000, not 2% of the new amount.

(a) “Improvement factor,” with respect to the Defined Benefit Program, means an increase of 2 percent in monthly allowances. The improvement factor shall be added to a monthly allowance each year on September 1, commencing on September 1 following the first anniversary of the effective date of retirement, or the date on which the monthly allowance commenced to accrue to any beneficiary, or other periods specifically stated in this part. (b) The improvement factor may not be compounded nor shall it be applicable to annuities payable from the accumulated annuity deposit contributions or the accumulated tax-sheltered annuity contributions. (c) Beginning July 1, 2014, the improvement factor shall vest for an active member in any calendar year in which active members paid increased member contributions pursuant to Section 22901.7. (d) If, for any reason, the increased employee contribution referenced in subdivision (c), and as required by subdivisions (a) and (b) of Section 22901.7, ceases to be legally required to be made pursuant to the act that added this subdivision, then the Legislature reserves the right to adjust the amount of the improvement factor up or down as the economic conditions dictate for all members who retire on or after January 1, 2014. No adjustments of the improvement factor shall reduce the monthly retirement allowance or benefit below that which would be payable to the recipient under this part had this section not been enacted. (e) For members who retired before the calendar year in which Section 22901.7 was added the Legislature reserves the right to adjust the amount of the improvement factor up or down as economic conditions dictate. Any adjustment of the improvement factor may not reduce the monthly retirement allowance or annuity below that which would be payable to the recipient under this part had this section not been enacted. (Amended by Stats. 2014, Ch. 47, Sec. 2. (AB 1469) Effective June 24, 2014. Amending action may become inoperative under conditions prescribed by Stats. 2014, Ch. 47, Sec. 13, subd. (b).)

Key Takeaways

•Retired people get a 2% raise in their monthly pension every year on September 1, starting one year after they retire.
•This raise doesn’t stack up year after year—it’s just a simple 2% added each time.
•The raise only applies to the main pension, not to extra money from special accounts like tax-sheltered annuities.
•If workers stop paying extra into the pension fund, the government can change the raise amount, but they can’t take away what retirees already earned.

Example

A teacher retires and starts getting $3,000 a month from their pension.

After one year, they get a 2% raise, so their new monthly pension becomes $3,060. This happens every September 1, but it’s always just 2% of their original $3,000, not 2% of the new amount.

Key Takeaways

Example

Key Terms

References

§ 22140 Retirement Benefit Annual Increase

Key Takeaways

Example

Key Terms

References

Key Takeaways

Example

Key Terms

Related Statutes

References

Key Takeaways

Example

Key Terms

Related Statutes

References