At its February 3, 2021 meeting, LACERA’s Board of Retirement approved a 1.5 percent 2021 cost-of-living adjustment (COLA) increase, which is less than the maximum allowed for all plans.
The adjustment is based on the change in the cost of living 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 1.45 percent. Rounded to the nearest one-half of one percent, as prescribed by law, the result is a 1.5 percent increase.
Since a 1.5 percent increase is below the maximum allowable COLA, most eligible retirees and payees will be able to draw from their accumulation to supplement an increase. Review the Accumulation Chart to determine your COLA increase for 2021; plan adjustments are summarized below.
COLA Increases for Plan E as of April 2021
Plan E allows for a maximum annual COLA of 2.0 percent. Increases apply only to service credit earned on and after June 4, 2002, and any purchased Plan E Elective COLA . (The portion of the 2.0 percent is based on the months of service earned on and after June 4, 2002, plus any purchased Plan E Elective COLA, divided by the total months of service.)
Depending on retirement date, Plan E retirees and eligible payees will receive a 1.5 to 2.0 percent increase; most will receive 2.0 percent.
- Those with retirement dates up to March 31, 2020, will draw 0.5 percent from their accumulation, making their total increase 2.0 percent.
- Those with retirement dates between April 1, 2020, and March 31, 2021 do not have enough COLA accumulation to draw from and will receive a 1.5 percent increase.
According to the provisions of LACERA retirement plans, if the COLA percentage exceeds the maximum allowable amount, the excess percentage is accumulated to supplement future COLA benefits (called the COLA accumulation). LACERA uses the COLA accumulation balances available to fund the maximum increase allowable under each plan. The longer you have been retired (or receiving a survivor's allowance), the more COLA carryover you have accumulated.