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Cost-of-Living Adjustment (COLA)
Current COLA: 1.28%
Cost-of-living adjustments (COLAs) allow your retirement benefit to keep pace with inflation and are based on the Consumer Price Index for All Urban Consumers (CPI-U) published by the Bureau of Labor Statistics. Your first COLA goes into effect on July 1 of the second calendar year after you retire and is effective each July 1 thereafter. The COLA appears in your August 1 benefit payment. During periods of no inflation or deflation, the COLA will be 0 percent.
Example: If you retire on September 1, 2012, you will become eligible for your first COLA on July 1, 2014.
How the COLA is Calculated
- The average of the monthly CPI-Urban for the most recent calendar year used to determine the VRS COLA is subtracted from the most recent average annual CPI-Urban to arrive at the index point change.
- The index point change is divided by the CPI-Urban for the most recent calendar year in which a COLA was paid.
- The result is multiplied by 100 to convert it to a percentage.
| 2010 | 218.056 | Most recent average of the monthly CPI-Urban |
|---|---|---|
| 2009 | n/a | The CPI-Urban recorded deflation for this year. The VRS COLA effective July 1, 2010 was 0%. |
| 2008 | 215.303 | Most recent calendar year used to determine the VRS COLA effective July 1, 2009 |
| Index Point Change | 2.753 (218.056 - 215.303 = 2.753) |
|
| Percent Change | 1.28% (2.753 ÷ 215.303 x 100 = 1.28) |
COLA effective July 1, 2011 |
Hired Before July 1, 2010?
During years when a COLA is provided, the amount matches the first 3 percent increase in the CPI-Urban and half the remaining increase, up to a maximum COLA of 5 percent.
Hired On or After July 1, 2010?
During years when a COLA is provided, the amount matches the first 2 percent increase in the CPI-Urban and half the remaining increase, up to a maximum COLA of 6 percent.
