Cost-of-Living Adjustments
COLA
There are cost-of-living adjustments (“COLAs”) for retirees and survivors who have been receiving a benefit for at least six months. The COLA is applied each July 1st and is based on the change in the Consumer Price Index (CPI).
COLAs are provided at 100% of the change in the CPI up to 3%, plus half of the change in the CPI in excess of 3%, up to a maximum of 5% for benefits attributable to credited service credited prior to July 1, 2012 and earned and unused sick leave credited prior to January 1, 2013. (“Tier 1”). A maximum COLA of 2.5% applies to retirement benefits attributable to credited service credited after July 1, 2012 and earned and unused sick leave credited after January 1, 2013 (“Tier 2”).
Example
If the CPI is 4% then retirees and beneficiaries receive 100% up to 3%, plus half of 1% (which is the excess above 3%) or 3.5% for Tier 1 service and 2.5% (the maximum) for Tier 2 service.
