News
From CalPERS
Purchasing
Protection Power (PPPA)
2012
Folks,
I’ve
incorporated below the exact text of two recent releases by CalPERS regarding
the PPPA changes for 2012 and the continued conversion of the CalPERS computer
system. I know we have grown accustomed
to the chart type approach which broke down by group and year of retirement
exactly what the PPPA calculation would be for each of the groups.
Instead,
with the new computerized system (myCalPERS.com), the calculation will be done
individually. There will not be a letter
with the format as was done in prior years.
I strongly suggest you look at your check warrant or direct deposit slip
to verify your individual amounts.
Hopefully, the explanation will be clear on your individual check stubs
to follow the application of the new PPPA rates.
______________________________________________________________________________
This
is the exact text of the CalPERS Circular Letter:
SUBJECT: 2012 PURCHASING POWER
PROTECTION ALLOWANCE (PPPA)
Purchasing
Power Protection Allowance (PPPA) payments are designed to restore up to a
maximum of 75% of the original purchasing power of retirement allowances for
those retirees with state or school service and 80% of the original purchasing
power of retirement allowances for those retirees with public agency service.
In most instances, eligibility for the PPPA benefit is based on the year of
retirement, cost-of-living adjustments received, payment of one-time increases,
also known as Ad Hoc increases, and declining purchasing power that is measured
by the United States City Average Consumer Price Index (CPI-U).
While
increases (or decreases) for this benefit will continue to be included as part
of the January 2012 monthly retirement warrants to those eligible retirees and
beneficiaries, conversion to a new automated system, mylCalPERS, has eliminated
the need for our actuarial staff to develop the PPPA factors/percentages you
may be accustomed to receiving each year.
Previously,
PPPA tables provided percentages for the three largest employer groups: the
State, Schools and a majority of Public Agencies providing 2% cost-of-living
adjustments. PPPA groups were created to conform to the calculation system in
place for the last two decades. MylCalPERS has replaced PPPA groups. The
program now performs an individual calculation on all 550,000 monthly payees.
The calculation method is the same for all monthly payees but it was designed
to recognize multiple variations in employer contracts that can affect the
benefit. In a group setting, this was possible only to a limited extent.
Our
actuarial staff has estimated inflation for calendar year 2011 in the amount of
3.305%. The PPPA calculation today continues to measure the total amount
of inflation experienced by each retiree during the course of their retirement
and derives a maximum amount that each payee can receive. That maximum figure
is then multiplied by the 75% or 80% threshold and compared to their current
allowance. If their current allowance is over the threshold, they should not
receive PPPA; if it is under the threshold, they can start to receive it.
Circular Letter No.: 400-076-11 December 27, 2011 Page 2
If
you have any questions regarding the PPPA program, please contact the Benefit
Services Division at P.O. Box 942716, Sacramento, California 94229-2716 or
contact CalPERS at the toll free telephone number of 888 CALPERS (OR 888-225-7377).
And
here is the exact text of the news release from the CalPERS Press Room:
Processing delays
expected to continue at CalPERS
Best time to call:
before 9 a.m. and after 11 a.m. Monday through Friday
CalPERS recently
transitioned to a new computer system consolidating 49 separate systems into
one integrated system. Key benefits include increased data security,
elimination of payroll errors, and a significant reduction in manual processes
- to name a few.
The transition to the new system is expected to take several months to
complete, and as a result, many of CalPERS services are taking longer to
process than they have in the past and call wait times have increased. Donna
Lum, Deputy Executive Officer, Customer Services and Support, says these longer
wait times are temporary.
“We are working to improve our processing and call wait times every day,” she
said. “We're already making headway and are seeing improvements - but we
anticipate it will be a few more months before we fully return to normal.”
According to Ms. Lum, the best time to call the CalPERS Customer Contact Center
is before 9 a.m. and after 11 a.m. Monday through Friday.
She also noted that even though processing times are longer, most benefits are
honored retroactively. “Benefits will be retroactive to the appropriate date.
In some cases this is the date we receive the application or appropriate forms,
or its the effective date of retirement.”
If you are waiting for a retirement benefit adjustment, service credit
purchase, tier conversion, or death benefits, following are some important
points to keep in mind (courtesy of www.calpers.ca.gov):
Adjustments to Retirement Benefits - Adjustments to retirement benefits based
on additional payroll reporting, a service credit purchase, a life event, or
some other factor, will be retroactive to the appropriate effective date.
Service Credit Purchases & Elections - Service credit eligibility and cost
factors are based on the date CalPERS receives the request. Service credit
purchases for pending or past retirements and vesting issues are currently the
highest priority. Once processed, benefits associated with the election will be
retroactive to the retirement date.
Tier Conversions - Members who recently retired or are retiring soon and
submitted a conversion request from State Second Tier to First Tier may not see
the increase in their initial retirement benefit. Although CalPERS is
experiencing delays in processing completed election forms, retirement benefits
will be adjusted retroactive to the retirement date.
Death Case Processing - CalPERS is focusing on accurate benefit payments and
uninterrupted health coverage for beneficiaries. All benefits will be paid
retroactive to the date of eligibility. Beneficiaries can expect to begin
receiving monthly death benefits approximately 90 days after CalPERS receives
all completed forms; lump sum benefits will take up to 120 days.
Be sure to check the CalPERS website www.calpers.ca.gov for additional news and
updates.
____________________________________________________________________________________________________________________________________________________________
Ray
Snodgrass
CDF
Firefighters
State
Retiree Director