The Cost of Living Adjustment (COLA) effective July 1, 2016 is +2.4% and all eligible pensions will be adjusted accordingly beginning with the pension payment dated July 29, 2016.
The 2016 COLA of 2.4% was presented and approved by the LAFPP Board at its regular meeting on April 7, 2016. The COLA will be effective July 1, 2016, and eligible pensioners and DROP participants will receive an increase of up to 2.4% beginning with their July 29, 2016 monthly pension payment.
COLAs are made to eligible pension benefits effective July 1 of every year. Pursuant to the City Charter and the Administrative Code, the COLA is based on the annual change in the Consumer Price Index (CPI) as published by the Bureau of Labor Statistics. Specifically, we look at the change in the CPI for All Urban Consumers in the Los Angeles-Riverside-Orange County Area for the prior 12-month period ending February. As of February 2016, the change in the CPI is +2.4%.
How does this affect LAFPP Pensioners?
COLAs can increase or decrease one’s pension benefit, or have no effect. For example, in 2009 the 12-month CPI change yielded a flat COLA (0.00%) for pensioners for the first time in LAFPP history. Also, please note that your monthly pension can never be reduced to less than your original pension amount as a result of a negative COLA.
For illustrative purposes, the following is an example of how an average monthly LAFPP pension benefit of $5,309 would be affected by a 2.4% COLA:
If 2.4% of $5,309 = $127.42
($5,309 x 0.024)
Then the monthly pension benefit would be increased to $5,436.42.
($5,309 + $127.42)
For more detailed information on the calculation of the CPI, please visit the Bureau of Labor Statistics website at http://www.bls.gov/cpi/.