COLA 2017 - Fiscal Year 2018 Adjustments

 

The Office of The Assistant Secretary Of Defense's memorandum and attachments provided detailed guidance regarding Cost-of-Living Adjustments (COLAs) and other computational procedures applicable to military retired and retainer pay and survivor annuities. It specifies COLAs for retired and retainer pay, survivor annuities, and premium determinations effective December 1, 2017, unless specified otherwise. These COLAs reflect the required adjustment for cost-of-living as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers for the four quarters ending with the third calendar quarter of 2017 (July, August, and September 2017). The following Cost-of-Living Adjustments (COLAs) are effective December 1, 2017, based on the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) through the third quarter calendar year 2017. The term "retired pay" includes retainer pay and the term "members" includes former members.

 

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:

Retired Pay Based on Rates of Pay Effective Percent Increase 10 U.S.C. Authority

         Before January 1, 2017 2.0 percent 1401a(b)(2)

         January 1 December 31, 2017 1.8 percent 1401a(c)

 

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, 2017 2.0 percent 1401a(b)(2)

         January 1 - March 31, 2017 1.8 percent 1401a(d) April 1 - June 30, 2017 1.0 percent 1401a(d) July 1 - September 30, 2017 0.4 percent 1401a(d) October 1 - December 31, 2017 0.0 percent 1401a(d)

 

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, 2017 1.0 percent 1401a(e)

         January 1 - March 31, 2017 1.0 percent 1401a(e)

         April 1 - June 30, 2017 0.5 percent 1401a(e)

         July 1 - September 30, 2017 0.2 percent 1401a(e)

         October 1 - December 31, 2017 0.0 percent 1401a(e) 2 COLAs for Survivor Annuities

 

4.  Retired Serviceman's Family Protection Plan annuities payable on December 1, 2017, 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 be increased by 2.0 percent (ref: 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 subchapter II of chapter 73, title 10, United States Code, will be increased by the same percentage specified in paragraphs 1, 2, or 3 above by which the retired pay of the person providing the annuity would have been increased at such time if the person were alive and otherwise entitled to such pay. (ref: 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 be increased 2.0 percent (ref: 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 be increased 2.0 percent from $250.78 to $255.80 effective December 1, 2017. (ref: P.L. 105-85, sec 644).

 

Increase in the SBP Low-Cost Premium Threshold

 

8.  Previous amounts with respect to which the 2.5 percent factor of the SBP premium (cost) formula apply will be adjusted effective December 1, 2017, in conjunction with the adjustments in retired pay made under the provisions of section 1401a of title 10, United States Code (ref: 10 U.S.C. 1452(a)(4)(B)). The Defense Finance and Accounting Service will perform necessary calculations to determine actual premiums based on the individual circumstances of each case.

 

9.  The amount with respect to which the 2.5 percent factor of the SBP premium (cost) is applied will be increased 2.4 percent effective January 1, 2018, from $803 to $822. The threshold premium is $20.55. Therefore, the Low-Cost Threshold premium is $20.55 plus 10% of the difference between retired pay and the threshold amount. The breakeven base amount is $1,761.43. (ref: 10 U.S.C. 1452(a)(4)(A)).

 

[Source:  NCO Advocate | December 19, 2017]

 

Yours in service,

 

Chuck Weber

VSO