Cost of Living Adjustments (COLA)
ACERA Retirees and Eligible Payees Receive a COLA Each April 1
Cost of Living Adjustments are made to retirement allowances every April 1 in accordance with County Employees Retirement Law of 1937. Each year, the San Francisco Bay Area’s Consumer Price Index (CPI), the most common measure of inflation, is used to calculate the COLA amount.
Between December 2015 and December 2016, the CPI for the Bay Area increased by a rounded 3.5%.
The maximum Annual COLA increase is 3% for Tier 1 and 3 members and 2% for Tier 2 and 4 members.
Your 2017 COLA Increase is Reflected in Your April 28, 2017 Retirement Check
Tier 1 and Tier 3 retirees who retire:
On or before 04/01/17 will receive a 3.0% COLA increase to their retirement allowances.
Tier 2 and Tier 4 retirees who retire:
On or before 04/01/17 will receive a 2.0% COLA increase to their retirement allowances.
COLA Maximums and the COLA Bank
The maximum statutory annual COLA increase is 3% for Tier 1 and 3 members and 2% for Tier 2 and 4 members. In years where the CPI increase is greater than these percentages, the difference between your maximum and the rounded CPI increase is automatically banked for future years. The banked percentage is used in years when the COLA is less than the maximum. Tier 1 and 3 members will bank a 0.5% COLA percentage on April 1, 2017 because there is an excess 1% for them. Tier 2 and 4 members will bank a 1.5% COLA percentage on April 1, 2017 because there is an excess 1% for them.
If your first day of retirement is April 1 or before, you will get the COLA for that year. If your first day of retirement is April 2 or after, you’ll have to wait for next year’s COLA.
Long-Time Retirees and the Supplemental COLA
Many long-time retirees will be eligible an additional non-vested Supplemental COLA.
What is the Consumer Price Index (CPI)?
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services such as food, housing, apparel, transportation, medical care, and education. The CPI is measured by the U.S. Bureau of Labor Statistics, which produces CPI figures for the U.S as a whole and for major urban areas such as the San Francisco Bay Area. ACERA bases its COLA on the CPI for the Bay Area.
Which ACERA members are in Tier 3?
Tier 3 members are exclusively current and former employees of the Livermore Area Recreation and Park District (LARPD). Tier 3 was created by LARPD in 2007.