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.
Summary of Past COLAs
2002 COLA - (Two-Phased)
1998 COLA - A percentage of monthly benefit from 1.86% to 25% based on the effective date of retirement
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
1989 COLA - ($2 x Years of Credited Service) + ($.50 x Years on Retirement)
1984 COLA - (2% of monthly annuity ($20 cap as of 7/1/84)) + ($1 x Years of Credited Service) + ($2 x Years on Retirement)
1979 COLA - A percentage of the first $1,000 of the monthly benefit based on the effective date of retirement
1974 COLA - A percentage of the monthly benefit, based on the effective date of retirement
1968 COLA - A percentage of the maximum benefit, based on the year of retirement