The Ideal Pension

The ideal pension is one which keeps the buying power of the pension constant as the consumer price index (CPI) changes with time. To calculate the current payment of such is trivial requiring only the original pension payment at the time of retirement and the discounted buying power. The following table includes some data on the number of Oak Ridge retirees and surviving spouses by year of their retirement, the Bureau of Labor Statistics (LS) CPI-U by year (base = 1967 = 100) and the discounted buying power by year of retirement. To use, simply, divide your original pension in the year of retirement by the percent discounted buying power in the last column and multiply by 100.

Example: for someone retiring in 1985; ($2003 / 55.1) x 100 = $3635, the ideal pension in 2005.

Your actual pension is the result of several complex rules decrease any ad hoc adjustment and cannot be calculated with out detailed knowledge of your pension history.

DISTRIBUTION OF RETIREES AND SURVIVING SPOUSES BY YEAR OF RETIREMENT

Percent of CPI-U/BLS and Original Buying Power by Year