In the early part of
every calendar year, the OCERS’ Board of Retirement sets
Cost-of Living Adjustment (COLA) for that year based
upon the Consumer Price Index (CPI) changes measured
from December one year to December of the following
year. For 2017, the
measurement is from December 2015 to
December 2016. The CPI is a measure of the average
change over time in the prices paid by urban consumers
for consumer goods and services such as food, housing,
apparel, transportation, medical care and
education. This information is provided by the Bureau of
Labor, and is analyzed by OCERS’ actuary, The Segal
Company, who then recommends the appropriate COLA for
consideration by OCERS’ Board.
OCERS’ actuary first
determines the annual increase or decrease in the CPI,
using the Bureau of Labor Statistics figures for our
geographic area. The COLA is limited to a maximum annual
increase or decrease of 3 percent. If the cost of
living figure exceeds 3 percent, any amount above 3 percent is added
to an OCERS member’s “COLA bank.”
If the cost of living figure is negative, any negative
amount up to 3 percent is subtracted from an OCERS
Member's "COLA bank" but will not go below zero. If a
member has a positive "COLA bank," the bank will be
reduced up to an additional 3 percent in order to grant
a positive COLA. If
an OCERS member has a zero COLA bank, OCERS' policy is
to maintain the bank at zero, and not apply a decrease
to create a negative COLA bank balance.
Typically, the more
years an OCERS’ member has been retired, the more they
have in their COLA bank.
2017, the COLA is 2
percent. This is based upon a change in the CPI of
percent which was rounded to 2
percent as is required by statute.
benefit recipients who began receiving benefits on or
before April 1, 1971 through April 1, 1982,
OCERS will grant a 3 percent COLA and reduce the COLA
banks by 1
percent. For those benefit recipients who began
receiving benefits between April 2, 1982 and April 1,
2017, OCERS will increase
applicable benefit allowances
by 2 percent with no reduction in COLA banks.
The COLA adjustment will appear on the May 1st check.
to view a chart to show how recent CPI
increases have impacted the "COLA bank"
for OCERS payees based on their original
Supplemental Targeted Adjustment for Retirees Cost of
Living Adjustment (STAR COLA), is paid to eligible
retirees and survivors who have lost more than 20% of
their original retirement benefit’s purchasing power due
to inflation. This discretionary benefit must be
approved by the Board of Retirement. This is usually
definitively considered at the March board meetings each year.
If it is granted, the adjustment will appear on the May
1st check. Presently, those retirees who retired on or
April 1, 1980 are receiving the STAR COLA. In 2017, it will
also cover those who retired on or before
April 1, 1980 beginning with the May 1st payment.