If you are a PERS member receiving a monthly pension benefit, you will soon see an increase in your benefit payments due to the annual cost-of-living adjustment (COLA).
This year’s COLA went
into effect July 1, 2021, and will be included in members’ August 1, 2021,
These adjustments are based on a regional Consumer Price Index (CPI) set by the U.S. Bureau of Labor Statistics for the prior year. The adjustments are limited to a maximum of 2% each year. PERS uses the West Region CPI, which was 1.74% for 2020.
For service prior to October 1, 2013, the COLA increase is capped at 2%. However, in years that the CPI exceeded 2%, the excess was banked in what is called a CPI carryover. In years when CPI is less than 2%, your CPI carryover is used to provide you with the maximum 2% COLA on benefits earned before October 1, 2013.
Therefore, if you retired before October 1, 2013, you will receive a 2% COLA for 2021.
If you earned service credit before and after October 1, 2013, your COLA will be calculated like this:
- 2% on service credit earned up to October 1, 2013.
- 1.25% on service credit earned after that date. And if your annual benefit is more than $60,000, you will receive 0.15% COLA on benefits exceeding that amount.
Take note of the following:
- If you retired after July 1, 2020, you do not yet have a CPI carryover. Therefore, the COLA on your benefit earned prior to October 1, 2013, will be the actual CPI of 1.74%.
- If you are an OPSRP member (hired after August 28, 2003) and your effective retirement date was on or after August 1, 2020, your COLA will be prorated based on the number of months for which you received a benefit before July 1, 2021.