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LACERS Annual Cost-of-Living Adjustment (COLA)

The LACERS Board recently approved an annual Cost-of-Living Adjustment, or COLA, of 1.9%, effective July 1, 2017.

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 retirement date and if you have any ‘banked’ COLA from previous years.

Effective Date of Retirement

Cost-of-Living Adjustment

If you retired on or before July 1, 1980

3.0%

If you retired on or after July 2, 1980 to June 30, 2017

1.9%

If you have been retired less than one year

1/12th of the increase for each whole month you have been retired prior to July 1st. 

How COLA ‘Banking’ Works

By May of each year, the LACERS Board is required to determine the Consumer Price Index (CPI) for the Los Angeles area in order to provide an annual COLA. If the CPI is 3.0% or less, the Board has the discretionary authority to set the COLA increase to an amount equal to the CPI.  The Board can not authorize a COLA greater than 3% (Administrative Code Section 4.1022 for Tier 1).

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."  If the CPI increase is less than 3.0% and 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.

Below is an example using the COLA amount for July 1, 2017.



Consumer
Price Index



Approved
COLA



Maximum
COLA



Difference

The amount that is available from past years when the CPI exceeded 3.0% and was ‘banked’ in your COLA account.

1.9%

1.9%

3.0%

-1.1%

A maximum amount of 1.1% will be used from the bank, if available