Board-Approved COLA Policy

Each year, the PSRS/PEERS Board of Trustees votes on the setting of a Cost-of-Living Adjustment (COLA) effective the following January. The process for setting COLAs is governed by Missouri law, but gives the Board some discretion. The decision is made according to Board policy and is based in part on the Consumer Price Index for Urban Consumers (CPI-U) as determined by the U.S. Bureau of Labor Statistics for the previous fiscal year, as well as the recommendation of the Systems’ actuary.

The current COLA policy was adopted by the Board in 2017. The policy contains a cumulative CPI calculation when the CPI-U falls between 0.0% and 2.0%.

Board-Approved Funding Policy
CPI-UCOLA 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 more5.0%
*resets cumulative calculation after a COLA is provided

The cumulative COLA calculation only applies when the CPI-U is between 0.0% and 2.0%. The cumulative COLA calculation period rests to 0.0% after a 2.0% COLA is provided and begins again.


The CPI-U in Year 1 is 1.0%. No COLA will be granted that year, because the CPI-U is between 0.0% and 2.0%. However, the 1.0% will carry over for the next year’s calculation.

The CPI-U in Year 2 is 1.5%. This year, because the cumulative CPI-U is 2.5% (1.0% + 1.5%) and is between 2.0% and 5.0%, a 2.0% COLA will be granted. The cumulative calculation will then reset to zero for the following year.

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