Audit: WY System Needs Better COLA Explanation

September 10, 2007 ( - Wyoming legislative auditors have recommended the state's Retirement System more effectively explain why members' cost of living increases (COLA) have steadily declined since 2004 despite "robust" economic growth.

A Billings Gazette news report said Wyoming Retirement System Director Thomas Mann has promised to ask his board to seek legislative approval for increased pension contributions to allow improved COLAs in light of the audit report.

According to the news story, the Wyoming system can allow COLAs of up to 3% as long as it is actuarially sound. The system’s board set an increase of 1% for 2007. Since 1994, annual pension payments have exceeded contributions.

Despite the call for better COLA-related communication, system members also must keep in mind that most receive fully paid retirement benefits, the report added.

Auditors also said the system is generally in good shape but faces a challenge as baby boomers leave the workforce. “As baby boomers retire, greater numbers of retirees will be relying on plan benefits yet there will be proportionately fewer contributing members,” said the Legislative Service Office staff report to the Legislature’s Management Audit Committee.

The Wyoming Retirement System manages seven defined benefit plans and one deferred compensation plan with combined assets of $6.2 million, the report said.

The audit report is here .