20 C.F.R. § 404.275 How is an automatic cost-of-living increase calculated?
Title 20 - Employees' Benefits
(a) Increase based on the CPI. We compute the average of the CPI for the quarters that begin and end the measuring period by adding the three monthly CPI figures (which are published to one decimal place), dividing the total by 3, and rounding the result to the nearest 0.1. If the average for the ending quarter is higher than the average for the beginning quarter, we divide the average for the ending quarter by the average for the beginning quarter to determine the percentage increase in the CPI over the measuring period. (b) Increase based on the AWI. If the AWI for the year that ends the measuring period is higher than the AWI for the year which begins the measuring period and all the other conditions for an AWI-based increase are met, we divide the higher AWI by the lower AWI to determine the percentage increase in the AWI. (c) Rounding rules. We round the increase from the applicable paragraph (a) or (b) of this section to the nearest 0.1 percent by rounding 0.05 percent and above to the next higher 0.1 percent and otherwise rounding to the next lower 0.1 percent. For example, if the applicable index is the CPI and the increase in the CPI is 3.15 percent, we round the increase to 3.2 percent. We then apply this percentage increase to the amounts described in §404.271 and round the resulting dollar amounts to the next lower multiple of $0.10 (if not already a multiple of $0.10). (d) Additional increase. See §404.278 for the additional increase that is possible. [69 FR 19925, Apr. 15, 2004]
Title 20: Employees' Benefits
PART 404—FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950– )
Subpart C—Computing Primary Insurance Amounts
Cost-of-Living Increases
§ 404.275 How is an automatic cost-of-living increase calculated?
