The Associated Press reports thatthis is the first time in a decade the 76,000 retired teachers, school district and non-public-safety city and state retirees will not get an annual increase.
Officials said low investment returns from 2000 to 2002 drained the fund that was used to provide the annual increase. They said the fund will need several years of strong returns before it reaches a level where pension hikes can be resumed, according to the AP.
Though the increases were never guaranteed and are not tied to the Consumer Price Index like many public pensions across the country, some retirees depended on them. Those retirees say they are worried about how they will be affected by years of stagnant income in an era of rising prices and rising health care costs.
While retirees received raises every year since 1994 and for most of the previous 20 years, state employees received only modest pay hikes and had no increases in their required contribution to the retirement system. Officials said retirees had been “fortunate” to receive raises.
The state retirement system is separate from the system that pays for elected officials, public-safety and corrections employees. The Public Safety Personnel Retirement System will give an annual increase this year to retired police and fire employees that is the largest in 21 consecutive years. The system’s administrator said retired politicians and corrections employees will receive a 4% increase.