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Indiana lawmakers begin study of cost-of-living increases for public pension retirees

Sen. Brian Buchanan (R-Lebanon) looks on during a presentation by an Indiana Public Retirement System actuary during a Wednesday, Sept. 20, 2023 meeting of the Pension Management Oversight Committee. (Brandon Smith / IPB News)

A legislative study committee took its first steps Wednesday in examining a guaranteed, yearly cost-of-living increase for public retirees.

But lawmakers are still cagey on what, if anything, they’ll do to help nearly 100,000 Hoosiers receiving public pension benefits.

In almost every budget going back three decades, the state provided either a cost-of-living adjustment, or COLA, to monthly pension benefits, or it’s given retirees a 13th check — an extra month’s worth of benefits.

It didn’t do that this year, opting instead to study a permanent COLA of 0.5 percent per year. The Indiana Public Retirement System told legislators Wednesday that would cost the state about $60 million a year.

Read more: Indiana's August unemployment rate bumped up compared to last year, but total employment did too

Study committee vice chair Rep. Jeff Thompson (R-Lizton) acknowledged that’s pretty small compared to the budget, which this year was more than $44 billion.

“But do you want to commit to that long term? I want to think and talk to some folks,” Thompson said. “We’ll see.”

INPRS also calculated the cost of COLAs at 1 percent, 1.5 percent and 2 percent per year. Those price tags are considerably higher: $1.8 billion per year for state and local governments combined, $3.8 billion and $5.9 billion, respectively.

Whatever lawmakers decide to do, committee chair Sen. Brian Buchanan (R-Lebanon) said it seems unlikely help would come in 2024.

“My understanding [is] traditionally we haven’t done adjustments like this in a non-budget year,” Buchanan said.

Still, both Buchanan and Thompson said they aren’t taking options off the table at this point.

Brandon is our Statehouse bureau chief. Contact him at bsmith@ipbs.org or follow him on Twitter at @brandonjsmith5.

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