Cost of Living Adjustment (COLA)
Retired SJCERA members are eligible for an annual cost-of-living adjustment (COLA) up to a maximum of 3 percent based on the Consumer Price Index (CPI) for the San Francisco-Oakland-Hayward area.
Members who have a retirement date on or before April 1 are eligible for that year's COLA. Members who retire after April 1 will be eligible to receive a COLA in future years, when applicable. The new COLA amount is applied to the May 1 retirement benefit payment.
COLA Bank
Because the maximum allowable COLA is 3 percent, any increase in the CPI above the maximum is placed in your COLA bank and can be applied in a future year if the CPI change for that year is less than the maximum. For example, if the change in the CPI were 4 percent, SJCERA would increase your benefit by 3 percent and place 1 percent in your COLA bank. The following year, if the CPI were only 2 percent, you would receive a 3 percent COLA (2 percent based on the CPI and 1 percent from your COLA bank).
Although rare, CPI decreases can occur, and would reduce your COLA bank. If the CPI decrease were greater than the amount in your COLA bank, the COLA portion of your benefit payment would be reduced. By law, your benefit cannot be reduced below your original benefit amount; only the portion of your monthly payment attributable to COLA payments can be reduced if a CPI decrease occurs.