The latest news release on the Consumer Price Index from the U.S. Bureau of Labor Statistics is a reminder that inflation is stuck in the 3+ percent per annum range, despite the Federal Reserve target of 2%. That observation has implications for pay adjustments. It is also a reminder that the pension plan provides full protection only up to 2%, so that the value of monthly payments in real terms will tend to decline. The Regents in the past have made ad hoc adjustments for pensioners whose real value has fallen below around 80% of the initial value. But the last time this was done, it was done grudgingly.
No comments:
Post a Comment