EMPLOYMENT AND TRAINING ADMINISTRATION
ADVISORY SYSTEM
U.S. DEPARTMENT OF LABOR
Washington, D. C. 20210

CLASSIFICATION

OWS

CORRESPONDENCE SYMBOL

DUIO

ISSUE DATE

December 4, 2002

RESCISSIONS

UIPl NO. 07-02

EXPIRATION DATE

December 31, 2003

ADVISORY

:

UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 07-03

 

TO

:

ALL STATE WORKFORCE AGENCIES

 

FROM

:

CHERYL ATKINSON
Administrator
Office of Workforce Security

 

SUBJECT

:

Increase in Federal Military Pensions

  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, 2002, based on the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) through September 2002. 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.

    1. 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, 2002

      1.4 percent

      1401a(b)(2)

      January 1, 2002

      1.4 percent*

      1401a(c)

      *The adjustment specified by 1401a(c)(1) would have been 1.8% but for the limitation imposed by section 633 of FY 2003 National Defense Authorization Act. As a result, the adjustments for those whose retired pay is based on the rates of pay effective January 1, 2002 is limited to the increase for those retired before January 1, 2002, or 1.4%.

    2. 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, 2002

      1.4 percent

      1401a(b)(2)

      January 1-March 31, 2002

      1.4 percent*

      1401a(d)

      April 1-June 30, 2002

      1.4 percent*

      1401a(d)

      July 1-September 30, 2002

      0.5 percent

      1401a(d)

      October 1-December 31, 2002

      0.0 percent

      1401a(d)

      *These adjustments are limited to 1.4%. The adjustments would have been 1.8% and 1.6% respectively, but for the limitation imposed by section 633 of the FY 2003 National Defense Authorization Act.

  4. Instructions. It is necessary for states with laws that provide for reduction of the weekly UI 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.