COLA Is Coming for 2012
For 2012, the Cost of Living Adjustment (COLA) increase will be 3.6% for most military retirees, for military survivor benefit plan and social security recipients, and for those drawing VA compensation (to include DIC) – a welcomed increase after two years without one. The President signed the last of the necessary legislation on 9 November — the Veterans’ Compensation Cost-of-Living Adjustment Act of 2011 (S. 894). This dispels a local rumor that spouses and children receiving dependency indemnity compensation (DIC) would be forgotten.
The 3.6% adjustment will become effective 1 December 2011 and will be received beginning with the January 2012 retired pay, Survivor Benefit Plan, Veterans Administration, and Social Security payments (note: to be received 30 December 2011 this year by military retirees).
However, there are two groups of military retirees who will not see a full COLA increase:
- Those who entered service on or after Aug. 1, 1986 and chose the REDUX retirement plan. The REDUX plan gave a $30,000 Career Status Bonus at 15 years of service. In return for the bonus, those servicemembers agreed to accept reduced retired pay and also a reduced COLA (1% below the normal COLA rate). They will see a 2.6% COLA.
- Those who retired after the first calendar quarter of 2011. Because they are considered to have already benefited from the active duty pay increase of 1.4% in January 2011, their COLA will be adjusted based upon the quarter in which they retired as follows:
a. Those who retired in the first quarter (January-March) will receive the full 3.6%,
b. Those who retired in the second quarter (April-June) will receive 2.4%,
c. Those who retired in the third quarter (July-September) will receive only 0.4%, and
d. Those who retire(d) in the fourth quarter (1 October and after) will see no increase at all this year.
As of 12 November 2011