Automatic COLAs, or cost of living adjustments, are not part of the SERS retirement benefit. As a result, you should plan that your pension payments will never increase in retirement.
COLAs increase monthly pension payments for those who are eligible to receive them. As a result, each COLA creates a new unfunded liability, which means increased costs to our employers and ultimately to the taxpayers who fund them.
We have no role in determining when or if retirees receive a COLA. The SERS retirement benefit is defined by law, the State Employees' Retirement Code. Any change to the benefit structure, including a COLA, requires a legislative amendment to the retirement code and the designation of funding for the increased cost of the benefit. As such, the decision to grant a COLA is made by the General Assembly and the Governor.
Over the past 40 years, the General Assembly has granted eight COLAs. In general, the amount of the COLA was determined by the individual retiree's years of service, years in retirement, and the increase in inflation since the previous COLA.
2002 COLA - (Two-Phased)
Phase 1 - A percentage of monthly benefit from 8% to 25%, effective 7/1/02, and granted to members who had already reached SERS normal retirement age when they retired prior to 7/2/90; 13.86% average benefit increase
Phase 2 - A percentage of monthly benefit from 2.27% to 9%, effective 7/1/03, and granted to members who had already reached SERS normal retirement age when they retired between 7/2/90 and 7/2/02; 6.99% average benefit increase
Early retirement annuitants receive increase in the July after reaching SERS normal retirement age
Disability annuitants entitled to increase regardless of age or years of service
If the retiree was eligible to receive the COLA, it passes to the beneficiary/survivor upon the member's death. Excluded Class AA, T-D, and D-4 members
1998 COLA - A percentage of monthly benefit from 1.86% to 25% based on the effective date of retirement
9.6% average benefit increase
Granted to all members who had already reached normal retirement age when they retired prior to 7/1/97
Early retirement annuitants received increase in the July after reaching SERS normal retirement age
Disability annuitants entitled to increase regardless of age or years of service
Passes to beneficiary
1994 COLA - A percentage of the first $3,000 of the monthly benefit based on the effective date of retirement + additional increase is paid to members who retired before 7/1/84 with 20 or more years of service
6.48% average benefit increase
Granted to all members who had already reached SERS normal retirement age when they retired prior to 7/1/92
Early retirement annuitants received increase in the July after reaching SERS normal retirement age
Disability annuitants entitled to increase regardless of age or years of service
Passes to beneficiary
Members receiving Mellow benefits are not eligible
1989 COLA - ($2 x Years of Credited Service) + ($.50 x Years on Retirement)
8.41% average benefit increase
Granted to all members who had already reached SERS normal retirement age when they retired prior to 7/2/87
Early retirement annuitants received increase in the July after reaching SERS normal retirement age
Disability annuitants entitled to increase regardless of age or years of service
Passes to beneficiary
1984 COLA - (2% of monthly annuity ($20 cap as of 7/1/84)) + ($1 x Years of Credited Service) + ($2 x Years on Retirement)
9.94% average benefit increase
Granted to all members who had already reached SERS normal retirement age when they retired prior to 7/1/82
Early retirement annuitants received increase in the July after reaching SERS normal retirement age
Disability annuitants were entitled to increase regardless of age or years of service
Passes to beneficiary
1979 COLA - A percentage of the first $1,000 of the monthly benefit based on the effective date of retirement
Increase ranged from 5% to 31%
Granted to all members who had already reached SERS normal retirement age when they retired prior to 7/1/78
Early retirement annuitants received increase in the July after reaching SERS normal retirement age
Disability annuitants entitled to increase regardless of age or years of service
Passes to beneficiary
1974 COLA - A percentage of the monthly benefit, based on the effective date of retirement
Increase ranged from 5% to 30%
Granted to all members who had already reached SERS normal retirement age when they retired prior to 3/1/74
Early retirement annuitants were entitled to the increase in the July following their 60th birthday
Disability annuitants entitled to the increase regardless of age or years of service
Passes to beneficiary
1968 COLA - A percentage of the maximum benefit, based on the year of retirement
Increases ranged from 1% to 150%
Granted to all members who had reached SERS normal retirement age when they retired and members receiving a SERS disability retirement benefit
Increase does not pass to the beneficiary at the time of member's death