1. Purpose. To
transmit Federal military retired pay due to annual cost of living adjustments
(COLAs).
2. Background.
Military COLA increases were effective December 1, 2003, based on the increase in the
Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)
through September 2003. Military retired pay, by law, is always rounded down
to the next lower dollar amount. The term “retired pay” includes retainer pay
and the term “member” includes former members.
3. COLAs
for Retired Pay.
a. Members
Before September
8, 1980.
The retired pay COLA for those who became a member of a Uniformed Service
before September 8,
1980, is specified
according to the effective date of the active duty basic pay rate used to
compute their pay as follows:
Retired
Pay Based on
Rates
of Pay Effective Percent Increase 10
U.S.C. Authority
Before
January 1, 2003 2.1
percent 1401a(b)(2)
January 1, 2003 1.7 percent
1401a(c)
b. Members On or After September 8, 1980. The retired pay COLA for those
who 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, 2003 2.1 percent 1401a(b)(2)
January
1-March 31, 2003 1.7 percent 1401a(d)
April
1-June 30, 2003 0.7 percent 1401a(d)
July 1-September 30, 2003 0.4 percent
1401a(d)
October 1-December 31, 2003 0.0 percent 1401a(d)
4. Instructions.
It is necessary for states with laws that provide for reduction of the weekly Unemployment
Insurance benefit amount by the prorated weekly amount of retired pay and
pensions to review the claimants records to identify claimants who will be
affected by these COLA increases.
States
should take action to make the appropriate deductions as required by state law
based on the increased military retired pay in accordance with state law.
5. Action
Required. State Administrators should provide the above information to
appropriate staff.
6. Inquiries.
Please direct all inquiries to the appropriate regional office.