ATLANTA — More than 300,000 active and retired educators across the state heaved a collective sigh of relief Wednesday after the Teachers Retirement System of Georgia board of trustees voted to keep retired educators’ guaranteed semi-annual cost-of-living adjustments intact.

The 10-member board of the Teachers Retirement System of Georgia voted unanimously at its board meeting in Atlanta to maintain retired teachers’ 1.5 percent cost-of-living adjustments, or COLAs, as an automatic benefit of the retirement system.

Bill Sloan, executive director of the Gainesville-based Georgia Retired Educators Association and former principal of East Hall High School, said the vote couldn’t have come out better for teachers.

"Retired educators had a wonderful victory," Sloan said. "We’re so pleased we’ll be able to continue like we have been for the past 39 years."

Following the suggestion of Gov. Sonny Perdue, the board voted 4-3 at its Sept. 24 board meeting, with three board members absent, to approve a COLA policy change that would have allowed it to vote on the COLA amounts annually, perhaps adjusting it anywhere from zero to its full 1.5 percent twice a year.

The proposed change would have allowed the board to determine each May how much it would grant retirees’ COLA payments every January and July.

The proposal had both active and retired teachers up in arms.

The policy amendment would have significantly altered a defined benefit teachers have counted on for nearly 40 years. Since 1969, teachers in the state have invested 5 percent to 6 percent of their salary each month in the Teachers Retirement System of Georgia to fund their pensions and 1.5 percent COLAs twice a year.

Betsy Kelly, 66, taught French in Cobb County for 38 years. She stood outside the meeting Wednesday with a boisterous crowd of about 70 other protesters who were unable to attend the board meeting because of limited seating.

Kelly said she felt the proposed policy change was an attempt by the state to "steal our money from us," and was worried the policy change might deter young people from entering the education field.

Sloan said the Teachers Retirement System of Georgia received more than 20,000 e-mails and letters from active and retired educators lobbying against the proposal.

Dan Ebersole, a system board member, proposed the COLA policy change to the board at the Sept. 24. It also was Ebersole who announced to the board Wednesday that attorneys for the state advised the board to not pass the proposed COLA policy change because of legal concerns.

Fellow board member Lisa Muldrew, an active teacher, then made a motion to maintain the system’s present COLA policy.

The board took final action on the proposed policy change Wednesday, deciding to keep the policy as written.

"I think the teachers and retirees can rest assured they’ll have a sound retirement," Ebersole said after the vote.

The policy change would have affected about 79,000 currently retired teachers and could have affected the roughly 225,000 public teachers and administrators now working in Georgia, Sloan said.

Jeff Ezell, executive director of the Teachers Retirement System, said the average retired teacher’s monthly COLA is $42. According to the system’s November payroll, Ezell said the average age of all the system’s retirees is 68 and their average monthly benefit is $2,823, which amounts to an average annual benefit of $33,876.

Bert Brantley, spokesman for the governor’s office, said the governor suggested the Teachers Retirement System board change its automatic COLA policy to provide the board with a "financial management tool." He said while the board has a responsibility to provide retired teachers their due benefits, it also must protect active teachers’ future pensions.

Brantley said the proposed COLA policy change was not related to the state’s expected revenue shortfall, which is estimated at about $2 billion.

The Teachers Retirement System has an annual payroll of about $2.4 billion a year, board member Ralph Steuer said. Public educators now pay 5 percent of their salary into the retirement system while state and local governments share the 9.28 percent matching rate. The state carries 56 percent of that match; local governments fund the rest.

In fiscal year 2008, which ended June 30, the state contributed $552,585,040 to the Teachers Retirement System, local governments paid $434,173,960 and employees contributed $554,027,000, Ezell said. He said the employee rate will be raised to 5.25 percent and the employer rate will be raised to 9.74 percent July 1.

In addition to the annual contributions, the system also is funded through investment income. Despite a $9 billion loss in the value of the Teachers Retirement System of Georgia since June 30, state analysts say the system remains "actuarially sound," holding strong at $41.6 billion, which is enough to finance 94 percent all system retirees’ benefits as of July, according to Sloan.

Lt. Gov. Casey Cagle issued a news release supporting the board’s move to maintain the COLAs.

"It has been my conviction to do all we can to honor our commitment to teachers who made contributions based upon an expectation of certain cost-of-living adjustments," Cagle said. "Therefore, before we consider any changes to the COLA, we should resolve many questions concerning the soundness of the fund and the impact on current contributions. During these tough economic times, it is imperative that we maintain this fund for our state’s current and future teachers."

Kathleen Bancroft, 66, was an educator in Georgia for 35 years. Bancroft, who ended her career as a speech pathologist in Cherokee County, said she feels the board did the right thing Wednesday, but doesn’t consider the COLA policy controversy to be final.

"You never know what’s going to come up next," she said. "This isn’t a guarantee (our COLAs are) going to continue."