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Cost-of-Living Adjustments (COLAs)

Eligible service and disability retirees may receive cost-of-living adjustments (COLAs) on monthly benefits beginning the fourth January following their retirement date. Qualified beneficiaries may also receive COLAs.

The January 2021 COLA is 2%. Current Missouri law states that COLAs cannot exceed 5% per year and the dollar amount of the COLAs in your lifetime cannot exceed 80% of your original monthly retirement benefit.

  • COLA Policy

    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-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

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

    Example

    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.

  • COLA History

    COLA History

    PSRS/PEERS COLAs by Year
    Year COLA
    2021 2.0%
    2020 0.0%
    2019 2.0%
    2018 1.63%
    2017 0.0%
    2016 2.0%
    2015 2.0%
    2014 2.0%
    2013 2.0%
    2012 2.0%
    2011 0.0%
    2010 0.0%
    2009 5.0%
    2008 2.7%
    2007 4.3%
    2006 2.5%
    2005 3.3%
    2004 2.1%
    2003 1.1%
    2002 3.3%
    2001 3.7%
    2000 2.0%
    1999 1.7%
    1998 2.3%
    1997 2.8%
    1996 3.0%
    1995 2.5%
    1994 3.0%
    1993 3.1%
    1992 4.70%
    1991 4.0%
    1990 4.0%
    1989 4.0%
    1988 3.7%
    1987 1.7%
    1986 3.7%
    1985 4.0%
    1984 2.6%
    1983 4.0%
    1982 4.0%
  • Compounding COLAs

    Determining Your Total Cost-of-Living Adjustments (COLAs)

    COLAs are Compounded

    To determine how much of an overall (compounded) COLA increase you have received, you cannot simply total the COLA percentages that have been given over the years.

    • Only the first COLA you receive is based on your original monthly benefit amount under the benefit plan you selected.
    • Subsequent cost-of-living increases are calculated by multiplying your current monthly benefit amount (at the time of the COLA) by the percentage of COLA increase.
    • Each subsequent COLA percent increase is figured on the new, larger benefit amount created by the previous COLA(s).
    • The result over time is a compounding effect that causes the overall percent increase in the monthly benefit to be higher than the total you get by simply adding together all of the COLA percentages you have earned over time.

    For more information on the COLAs you have received, log in or contact us