Cost-of-Living Adjustments (COLA)

Cost-of-living adjustments are intended to help your retirement benefit payments keep pace with the rise in cost of goods and services over time.
FRS Pension Plan FRS Investment Plan
  • Each July 1 after retirement, Pension Plan members will earn a 3% COLA for all service prior to July 1, 2011. Any retirement service earned on or after July 1, 2011 will not be subject to a COLA.

  • You will receive a fixed 3% cost-of-living increase on your June 30 monthly benefit amount (increase only applicable for FRS service earned prior to July 1, 2011). The increase does not include the Health Insurance Subsidy. Regardless of whether inflation is greater or less than 3%, your pre-July 1, 2011 benefit will still be adjusted by 3%.

  • If you have been retired for less than twelve months, your initial cost of living is prorated.
  • You may purchase one of several fixed annuities that offer annual cost-of-living increases at any time after retiring. You can use some or all of your account balance to buy these annuities, which are guaranteed by a highly rated private-sector insurance company (MetLife). These annuities can provide guaranteed payments for life, payments over certain periods or have joint and survivor benefits. You can choose monthly or other payment periods.

  • If you elect a lump-sum distribution or you choose not to purchase an annuity that offers a cost-of-living increase, you will not receive an automatic annual cost-of-living increase. Whether your benefits keep up with inflation will depend on the performance of your investment funds.