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BENEFITS


CURRENT YEAR COST-OF-LIVING ADJUSTMENT

BOR APPROVES 2021 RETIREE COST-OF-LIVING ADJUSTMENT

At its February 3, 2021 meeting, LACERA’s Board of Retirement approved a 1.5 percent 2021 COLA increase, which is less than the maximum allowed for retirees and eligible payees for all plans. This will be supplemented by the available COLA Accumulation for each plan, depending on retirement year.

On April 7, 2021, the Board of Retirement approved updates to the COLA accumulation balance for all plans, which retroactively increased all 2021 COLA accumulation balances and corrected the 2021 COLA awards for some Plan A members. See the updated COLA Accumulation chart for a more detailed breakdown of COLA effects on each of the plans.

The following increase will be reflected in your April 30 benefit payment, as applicable (see more details regarding your plan’s 2021 COLA below):

  • Up to +3.0 percent for some Plan A retirees and eligible payees (+2.3 percent for most Plan A members)
  • Up to +2.0 percent for most Plans B, C, D, and G retirees and eligible payees
  • Up to +2.0 percent for Plan E retirees and eligible payees

HOW THE COLA WAS DETERMINED

The adjustment is based on the change in the cost-of-living index from December 2019 to December 2020, as released by the Bureau of Labor Statistics Consumer Price Index (CPI) for all urban consumers in the Los Angeles–Long Beach–Anaheim metro area. The year-to-date change is 1.5 percent. When rounded to the nearest one-half of one percent, as prescribed by law, the result is a 1.5 percent benefit increase. Because the 2021 COLA increase is below the maximum COLA threshold for all plans, there will be no amount added to the accumulation accounts. Instead, most plans, depending upon retirement date, will draw from available COLA Accumulation to supplement COLA Award.

Plan A Retirees and Eligible Payees Will Receive an Increase up to 3.0 Percent

Plan A allows for a maximum annual COLA award of 3.0 percent. Since this year’s increase is less than that amount, LACERA will draw from the available COLA Accumulation to supplement the approved increase.

  • Those with retirement dates up to March 31, 1981 will receive a 3.0 percent increase.
  • Those with retirement dates from April 1, 1981 to March 31, 2018 will receive a 2.3 percent increase.
  • Those with retirement dates from April 1, 2018 to March 31, 2019 will receive a 1.7 percent increase.
  • Those with retirement dates from April 1, 2019 to March 31, 2021 do not have enough accumulated COLA to draw from and will receive 1.5 percent increase.

Plan B, C, D, and G Retirees and Eligible Payees Will Receive an increase up to 2.0 Percent

These plans allow for a maximum annual COLA award of 2.0 percent. Since this year’s increase is less than that amount, LACERA will draw from the available COLA Accumulation to supplement the approved increase.

  • Those with retirement dates up to March 31, 2020 will receive a 2.0 percent increase.
  • Those with retirement dates from April 1, 2020 to March 31, 2021 do not have enough accumulated COLA to draw from and will receive a 1.5 percent increase.

Plan E Retirees and Eligible Payees Will Receive an Increase up to 2.0 Percent

Plan E* members will receive a COLA award prorated based on work history, up to 2.0 percent. Since this year’s increase is less than that amount, LACERA will draw from the available COLA Accumulation to supplement the approved increase.

  • Those with retirement dates from June 4, 2002 to March 31, 2020 will receive up to a 2.0 percent increase.
  • Those with retirement dates from April 1, 2020 to March 31, 2021 do not have enough accumulated COLA to draw from and will receive up to a 1.5 percent increase.

*Plan E COLA increases apply only to service credit earned after June 4, 2002, and any purchased Plan E Elective COLA. The portion of the 2.0 percent COLA is based upon a ratio of the months of service earned after June 4, 2002, plus any purchased Plan E Elective COLA, divided by the total months of service.

2021 COLA Adjustment: Effects on All LACERA Plans
Retirement Plan COLA Increase Approved for 2021 Amounts from COLA Accumulation 2021 COLA Maximum Allowed
Plan A 1.5%   Up to 1.5%   Up to 3.0%
Plans B, C, D, and PEPRA Plans C & G 1.5% Up to 0.5%  Up to 2.0%
Plan E 1.5% Up to 0.5% Up to 2.0%

 

5/6/21