Overview
A Cost-of-Living Adjustment (COLA) is a permanent annual increase to your pension to help offset the impact of inflation. Once you meet the eligibility requirements, COLA is automatically added beginning with the pension payment you receive the month after you become eligible (for more information, see Receiving COLA After Becoming Eligible). Afterward, you receive a COLA increase each year beginning with your end-of-September pension payment.
How the Annual COLA Percentage is Determined
In accordance with State law, the annual COLA is 50 percent of the rate of inflation as determined by the Consumer Price Index at the end of the State fiscal year, March 31. The COLA percentage is rounded up to the nearest tenth and cannot be less than 1 percent or more than 3 percent annually.
This Year’s COLA Percentage and Maximum Increase
This year's COLA beginning September 2026 is 1.7 percent (see chart below for historical COLA percentages and maximum increases).
The percentage is applied to a maximum of $18,000 of your annual pension benefit as if you had chosen the Single Life Allowance pension payment option, even if you selected a different option at retirement. Using the Single Life Allowance gives you the highest possible COLA.
- If your annual pension benefit is $18,000 or more, you will receive the maximum monthly increase of $25.50 (for a maximum annual increase of $306) before taxes.
- If your annual pension benefit is less than $18,000, the percentage is applied to your benefit amount and any prior years’ COLA increases.
Because COLA is a permanent adjustment to your pension, the annual increases you receive are cumulative—meaning the COLA increase beginning September 2026 is added to your existing monthly COLA amount. For example, a retiree who became eligible for COLA last year and receives the maximum annual increase would continue receiving last year’s monthly COLA increase of $18 in addition to this year’s monthly COLA increase of $25.50.
| Pension Amount | COLA Increase | Pension Amount After COLA Increase | |||
|---|---|---|---|---|---|
| Sep 2025–Aug 2026 | $18,000 x 1.2% | ||||
| Monthly | $2,000.00 | + | $18.00 | = | $2,018.00 |
| Annually | $24,000.00 | + | $216.00 | = | $24,216.00 |
| Sep 2026–Aug 2027 | $18,000 x 1.7% | ||||
| Monthly | $2,018.00 | + | $25.50 | = | $2,043.50 |
| Annually | $24,216.00 | + | $306.00 | = | $24,522.00 |
| In this example, the retiree is receiving a cumulative amount of $43.50 monthly for a total of $522.00 annually in COLA increases. | |||||
If you are a spouse receiving a lifetime benefit of a deceased retiree, you’ll receive half of the retiree’s COLA amount.
If you are a beneficiary receiving an accidental death benefit of a deceased Employees' Retirement System (ERS) member, you’ll receive the retiree’s full COLA amount.
Notice of Changes to Your Monthly Pension Payment
You will receive a notice of the change to your net monthly retirement benefit by mail at the end of September. It will show the previous and new monthly amounts for your COLA, your net retirement benefit (the total pension payment amount you receive after credits, deductions and taxes) and any other changes to your credits, deductions or taxes. To determine your monthly increase, subtract the amount listed under ‘Last Month’ from the amount listed under ‘This Month.’
Sample Net Change Letter
You can also view your pension pay stub online for a breakdown of credits and deductions and to see year-to-date totals throughout the year.
- Sign in to Retirement Online.
- Look under I want to… (located at the top right).
- Click View Pension Check link.
- Select date of the pension payment to view.
Historical COLA Percentages and Maximum Increases
The maximum monthly increase listed in the table below applies to eligible retirees or beneficiaries with an annual pension benefit of at least $18,000. For more information, refer to this year's COLA percentage and maximum increase and the COLA eligibility requirements.
| Effective Year (Beginning in September) | COLA Percentage | Maximum Monthly Increase for a Retiree or a Beneficiary of an Accidental Death Benefit | Maximum Monthly Increase for a Spouse Receiving a Lifetime Benefit of a Deceased Retiree |
|---|---|---|---|
| 2026 | 1.7% | $25.50 | $12.75 |
| 2025 | 1.2% | $18.00 | $9.00 |
| 2024 | 1.8% | $27.00 | $13.50 |
| 2023 | 2.5% | $37.50 | $18.75 |
| 2022 | 3.0% | $45.00 | $22.50 |
| 2021 | 1.4% | $21.00 | $10.50 |
| 2020 | 1.0% | $15.00 | $7.50 |
| 2019 | 1.0% | $15.00 | $7.50 |
| 2018 | 1.2% | $18.00 | $9.00 |
| 2017 | 1.2% | $18.00 | $9.00 |
| 2016 | 1.0% | $15.00 | $7.50 |
| 2015 | 1.0% | $15.00 | $7.50 |
| 2014 | 1.0% | $15.00 | $7.50 |
| 2013 | 1.0% | $15.00 | $7.50 |
| 2012 | 1.4% | $21.00 | $10.50 |
| 2011 | 1.4% | $21.00 | $10.50 |
| 2010 | 1.2% | $18.00 | $9.00 |
| 2009 | 1.0% | $15.00 | $7.50 |
| 2008 | 2.0% | $30.00 | $15.00 |
| 2007 | 1.4% | $21.00 | $10.50 |
| 2006 | 1.7% | $25.50 | $12.75 |
| 2005 | 1.6% | $24.00 | $12.00 |
| 2004 | 1.0% | $15.00 | $7.50 |
| 2003 | 1.6% | $24.00 | $12.00 |
| 2002 | 1.0% | $15.00 | $7.50 |
| 2001 | 1.5% | $22.50 | $11.25 |
COLA Eligibility Requirements
To begin receiving COLA, you must meet one of the following eligibility requirements.
Retirees
If you are a retiree receiving a:
- Service retirement benefit and you were a:
- Non-uniformed employee (covered by a regular retirement plan which required you meet the age specified by your plan to retire), you must be:
- At least age 62 and retired for at least five years.
- Uniformed employee such as a police officer, firefighter or correction officer (covered by a special retirement plan which required 20 or 25 years of service to retire, regardless of your age), you must be:
- At least age 55 and retired for at least ten years.
OR
- At least age 62 and retired for at least five years.
- At least age 55 and retired for at least ten years.
- Non-uniformed employee (covered by a regular retirement plan which required you meet the age specified by your plan to retire), you must be:
- Disability retirement benefit: You must be retired for at least five years (regardless of your age).
Beneficiaries
If you are a:
- Spouse receiving a lifetime benefit of a deceased retiree:
- If the retiree was eligible for or receiving COLA before they died, you will receive COLA when your pension payments begin.
- If not, you will be eligible for COLA when the retiree would have been eligible.
- Beneficiary receiving an accidental death benefit of a deceased Employees' Retirement System (ERS) member, you will be eligible for COLA after receiving benefit payments for at least five years.
Receiving COLA After Becoming Eligible
Once you meet the eligibility requirements, COLA is automatically added beginning with the pension payment you receive the month after you become eligible. It will include a prorated amount for the month you became eligible as well as the full amount for the current month’s payment. For example, if you become eligible for COLA in the middle of June, you’ll start receiving COLA beginning with your end-of-July pension payment, and your first COLA will include a partial amount for June and the full amount for July.
Rev. 8/26