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2016 COLA


At its February 11 meeting, LACERA’s Board of Retirement approved a +2.0 percent 2016 Cost-of-Living Adjustment (COLA) for retirees and eligible survivors, effective April 1, 2016.* This increase will be reflected in your April allowance. The adjustment is based on the change in the cost of living from December 2014 to December 2015, as released by the Bureau of Labor Statistics Consumer Price Index (CPI) for all Urban Consumers in the Los Angeles-Riverside-Orange County metro area. The year-to-date change is 2.03 percent. Rounded to the nearest one-half of one percent, as prescribed by law, the result is 2.0 percent.

Plan B, C, D, E, and G Retirees and Eligible Survivors Will Receive up to 2.0 Percent Increase

Retired members in Plans B, C, D, and PEPRA Plans C and G will obtain a 2.0 percent COLA increase, which is the maximum allowed by their plans. Retired members in Plan E will obtain up to 2.0 percent.** Therefore, the members in these plans have no need to draw from their COLA Accumulation; it will remain unchanged from 2015.

Qualified Plan A Retirees, Survivors Will Draw from COLA Accumulation to Supplement 2016 COLA

According to the law, in years in which the COLA percentage exceeds the maximum allowable, the excess amount is accumulated to supplement future COLA benefits. This accumulated percentage carryover is called the COLA Accumulation. Think of it as a COLA bank — the longer you have been retired (or receiving a survivor's allowance), the more COLA carryover you will have accumulated. Therefore, since the maximum allowed for members in Plan A is 3.0 percent, a 1.0 percent withdrawal from COLA Accumulation will make up the difference for those eligible, allowing for a 3.0 percent COLA increase (see the following chart).

2016 COLA Adjustment: Effects on All LACERA Plans
Retirement Plan Retirement Date* 2016 COLA Adjustment + Withdrawal from COLA Accumulation = Total 2016
COLA Increase
Plan A Prior to 4/1/1982 2.0%   +   1.0%   =   3.0%
Plan A After 4/1/1982 2.0%   + 0   =   2.0%
Plans B, C, D, and PEPRA Plans C, G All Dates 2.0%   + 0   =   2.0%
Plan E** 6/4/02 - 3/31/16 2.0%   + 0   =   2.0%

*Includes eligible beneficiaries and alternate payees.
**Plan E COLA increases apply only to service credit earned after June 4, 2002. Plan E members who retired after June 4, 2002, will receive up to a 2.0 percent COLA increase. The portion of the 2.0 percent COLA is based upon a ratio of the months of service earned after June 4, 2002, divided by the total months of service.

View the COLA Accumulation chart for a more detailed breakdown of COLA effects on each of the plans.