AZ retirees lose annual increases

Annual pension payraises that thousands of Arizona retirees have received for more than a decade will not be available this year. The increases will not be coming for at least another five years, as well.

The Arizona Republic reports:

The Arizona State Retirement System, which covers 76,000 retired teachers, school district and non-public-safety city and state retirees, said that low returns on investments from 2000 to 2002 drained the fund used to give the annual bump-up. It will take several years of strong returns before the system is able to give retirees raises again, officials said.

Though not tied to the Consumer Price Index, these annual July 1 raises were viewed by many retirees as cost-of-living increases. The retirees now worry about the lost income that will add up over the next five years, especially as health insurance rates are expected to increase in January.

"Most people depend on it, look forward to it and expect it," said Barbara Masztakowski, 67, who retired from the Chandler Municipal Airport in 2003. "Has gas stayed the same? Groceries stayed the same? Anything stayed the same? No. But my income is going to."