As a retiree I have had to listen to anti-taxers complain about our alleged generous pension for years.
Some focus on our yearly COLA increase.
Each February we get a 3% compounded increase over the pension we received the year before.
Prior to 1989 the increase was 3% simple.
Meaning 3% of our starting pension amount.
The legislature changed the benefit to 3% compounded because inflation was way more than that and they felt sorry for us.
In 1990 the official government CPI was double that.
So, the change from simple to compounded wasn’t generous.
It was re-election insurance.
Since then the 3% compounded has kept retirees aligned with increases in the costs of things. None of us have gotten rich.
But things may be about to change.
There is growing concern with inflation.
Writes the NY Times:
Consumer prices jumped at the fastest pace in more than a decade in April, surprising economists and intensifying a debate on Wall Street and in Washington over whether inflation might reach levels that would squeeze households and ultimately undermine the recovery.
Suddenly that 3% compounded doesn’t look so generous anymore.
And I don’t hear anybody suggesting a raise to keep us up with the cost of living.
Remember that when and if the cost of stuff goes down.