Cost of Living Adjustments (COLA)

Cost of Living Adjustments (COLA)

Overview

Each year the LACERS Board approves Cost-of-Living Adjustments (COLAs)for Tier 1 and Tier 3 retired members and beneficiaries based on the Consumer Price Index (CPI) for the Los Angeles area. The COLA becomes effective July 1st of each year.

You will receive the COLA if you are a retired LACERS Member or an eligible surviving spouse/domestic partner who receives a continuance benefit. The amount of COLA you receive depends on your Tier and retirement date. If you retire prior to July 1 in any year, your COLA will be pro-rated at 1/12th of the increase for each whole month you have been retired.

Maximum COLA Per Tier

Tier Maximum COLA Bank
1 and 1E 3.0% Yes
3 2.0% No

COLA Bank - Tier 1 and Tier 1E Members Only

Because the COLA cannot exceed 3.0%, when the CPI is greater than 3.0%, the difference between the maximum 3.0% and the actual CPI will be set aside in a COLA bank. In years when the CPI increase is less than 3.0%, and if you have a bank balance available from previous years, the COLA bank will be utilized to increase your COLA up to the maximum 3.0% for the year. If you have a zero bank balance, your COLA will not be increased.

Requirements to Receive the COLA Bank
Only those retirees (or continuing survivors) whose benefits commenced on July 1 and continued for one full Fiscal Year will receive COLA Bank, if any.

For example, the July 1, 2020 COLA bank is 0.1% for a July 1, 2019 retirement date.

COLA Bank Example

Consumer Price Index (CPI) Approved COLA Maximum COLA Difference COLA Amount Banked for Future Years
3.8% 3.0% 3.0% 3.8%-3.0% = 0.8% 0.8%

July 2020 Approved COLA

Tier Index (CPI) Approved COLA Maximum COLA COLA Bank
1 and 1E 3.1% 3.0% 3.0% 0.1%
3 3.1% 2.0% 2.0% N/A

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