Coming in January: 2% COLA for Eligible Benefit Recipients
The PSRS/PEERS Board of Trustees has approved a 2% cost-of-living adjustment (COLA) for eligible benefit recipients, effective Jan. 1, 2026. The increase will first appear on Jan. 31, 2026, benefit payments.
“This is the sixth year in a row that we have provided a COLA to our retired members,” said PSRS/PEERS Board Chair Beth Knes. “The Board remains committed to helping our members preserve their financial security in retirement.”
How the COLA Is Set
The COLA is based on the Consumer Price Index for Urban Consumers (CPI-U). For fiscal year 2025 (July 1, 2024 – June 30, 2025), the CPI-U rose 2.67%. According to Board policy, if CPI-U increases between 2% and 5%, a 2% COLA is granted.
| CPI-U | COLA per Board-Approved Funding Policy |
|---|---|
| Less than 0.0% | 0.0% |
| 0.0%-2.0% | 0.0% when CPI-U is cumulatively below 2.0% |
| 0.0%-2.0% | 2.0% when CPI-U cumulatively reaches 2.0% or more* |
| 2.0%-5.0% | 2.0% when the CPI-U is at least 2.0%, but less than 5.0% |
| 5.0% or more | 5.0% |
| *resets cumulative calculation after a COLA is provided | |
COLAs are compounded: Each year’s increase builds on previous increases. That means to calculate your 2026 COLA, take your current benefit — not your original benefit — and multiply it by 2%.