Proposition 124 - What does it mean to the retired membership?

May 17, 2016

PROPOSITION 124 – What does it mean to the retired membership?

On May 17, 2016, the State of Arizona voters had an opportunity to cast their ballots on Prop 124, regarding a COLA (Cost-of-Living Adjustment) for the Public Safety members of the pension fund. The Proposition passed and the new law itself determines the payment schedule and defines the calculation of the new COLA payment. Please note that the passage of Proposition 124 does not affect the members of the Elected Officials’ Retirement Plan (EORP) or the Corrections Officer Retirement Plans (CORP). Here are some questions and answers as to the timeline and other information concerning the COLA:

 When should we expect to see the first COLA payment?

The first payment will be made with the July 2018 benefit check.

• Why do we have to wait until July 2018?

Proposition 124 becomes law August 6, 2016. The law states that we must prefund this new COLA with a full year of contributions before any payment is made to the members.The contribution rates that will reflect this prefunding will not be published until mid-to-late fall 2016, effective for the fiscal year beginning July 1, 2017. One full year of these contributions ends June 30, 2018. So, the first time we are legally able to pay this COLA will be with the July 2018 benefit check.

• How is the COLA amount determined?

The COLA amount is determined by the change in the Consumer Price Index (CPI) for the metropolitan phoenix-mesa area for the calendar year ending just prior to each July payout.

• What is the CPI?

“The consumer price index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. The CPI is calculated by taking price changes for each item in the predetermined basket of goods and averaging them; the goods are weighted according to their importance. Changes in CPI are used to assess price changes associated with the cost of living.” (

• What percentage or dollar amount will be awarded?

The law states that the COLA is up to a 2% cap. For example, if the CPI is 1.8% for theyear, we will award the COLA at 1.8%. If the CPI is 5.2%, we will grant a COLA of only 2% due to that cap. Understand that this means that the percentage, or COLA, will fluctuate each year with the CPI results. 

Jared A. Smout

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