LVMAC Tidbits

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:

  1. 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.
  2. 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.

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As of 12 November 2011
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