This COLA is a permanent annual increase to your retirement benefit. It is based on the cost-of-living index and is designed to address inflation.
How COLA is Determined
The law requires that COLA payments, subject to certain limitations, equal 50 percent of the previous year’s inflation rate, but are never less than 1 percent or more than 3 percent of your benefit. The adjustment is applied to the first $18,000 of your Single Life Allowance, even if you selected a different pension payment option. Once COLA payments begin, you will receive an increase to your monthly benefit each September.
The September 2020 COLA equals 1 percent, for a maximum annual increase of $180.00, or $15.00 per month before taxes.
Who is Eligible for a COLA?
To begin receiving COLA payments, you must be:
- Age 62 or older and retired for five or more years; or
- Age 55 or older and retired for ten or more years (uniformed employees such as police officers, firefighters and correction officers covered by a special plan that allows for retirement, regardless of age, after a specific number of years); or
- A disability retiree for five years; or
- The spouse of a deceased retiree receiving a lifetime benefit under a pension payment option elected by the retiree. An eligible spouse is entitled to one-half the COLA amount that would have been paid to the eligible retiree when the retiree would have met COLA eligibility; or
- A beneficiary receiving the accidental death benefit for five or more years on behalf of a deceased Retirement System member.
When Will You See the Increase?
Eligible retirees will see the first 2020 COLA payment in their September pension payment. It will be available to those with direct deposit on September 30, 2020. If you receive a paper check, the COLA will be included in the check to be mailed September 29, 2020.
You can sign in to your Retirement Online account to view a current breakdown of your pension payment. If you have direct deposit and are eligible for a COLA increase, you will receive notification of the net change in your monthly payment amount in September.
If you are not eligible for a COLA yet, you will receive your first increase in the month after you become eligible. This payment will include a prorated amount to cover the month you became eligible. After that, you will receive a COLA increase each September.