Cost-Of-Living Adjustments (COLA)
Payees may be eligible to receive COLAs on their retirement allowance each July. The adjustment is tied to the U.S. Department of Labor’s Consumer Price Index. A member must be retired at least one year as of July 1 to be eligible to receive that year’s increase.
Service earned before July 1, 2011, receives a COLA based on the plan provisions in place when the service was earned. For service earned on or after July 1, 2011, the adjustment is capped at 2.5% when the system’s investment fund earns or exceeds its assumed actuarial rate of return (currently 7.45%) or capped at 1% in years when this rate is not met. This cap does not apply to members and retirees of the Employees’ and Teachers’ Retirement System or to retired legislators or judges. Other caps may apply.
Teachers, employees, correctional officers, state police, law enforcement officers, and local fire and police employees
COLAs are effective with the July benefit payment, and are based upon changes in the Consumer Price Index. A payee must be retired for at least twelve months before they are eligible for their first COLA. For example, a payee with a retirement date of July 2018 would become eligible for their first COLA in July 2019. A payee with a retirement date of August 2018 would become eligible for their first COLA in July 2020.
Judges and legislators
COLAs for payees of the Judges’ Retirement System or the Legislative Pension Plan become effective whenever active members of those systems receive a salary increase. A payee does not need to be retired for at least twelve months before becoming eligible for their first COLA.