The Cost of Living Adjustment (COLA) is 3.6% for 2018 and was approved by the Board of Fire and Police Pension Commissioners on April 19, 2018.  The COLA will be effective July 1, 2018, and all eligible pensioners and DROP participants will receive an increase accordingly, beginning with the pension payment dated July 31, 2018.  

• Tiers 1 and 2 will receive 3.6%.
• Tiers 3 through 6 and DROP will receive 3.0%*; and
• Tiers 5 and 6 will have the additional 0.6% stored in a COLA bank.

*For new pensioners or DROP entrants (excluding Tier 2 DROP entrants), the first year’s COLA is prorated based on the number of completed months since the effective pension date, and may not receive the full 3.0%.

How does this affect LAFPP Pensioners?

This is an example of how a monthly pension benefit of $5,686 would be affected by this year’s COLA of 3.6%:

For Tiers 1 and 2

If 3.6% of $5,686 = $204.70

($5,686 x 0.036)

Then the monthly pension benefit would be increased to $5,890.70.

($5,686 + $204.70)

For Tiers 3 through 6 and DROP

If 3.0% of $5,686 = $170.58

($5,686 x 0.030)

Then the monthly pension benefit would be increased to $5,856.58.

($5,686 + $170.80)

Tiers 5 and 6 will receive a 0.6% in their COLA bank.

New Geographic Area

The COLA is based on the annual change in the Consumer Price Index (CPI), as published by the Bureau of Labor Statistics (BLS).  In January 2018, the BLS introduced new geographic area samples for the CPI. The 2018 COLA was calculated using a 12-month period from March 2017 through February 2018, based on the new Los Angeles-Long Beach-Anaheim area sample.

For questions regarding the COLA, please contact the Retirement Services Section at (213) 279-3125 or (844) 88-LAFPP, ext. 93125.  For detailed information on the calculation of the CPI, please visit the BLS website at http://www.bls.gov/cpi/ or call (202) 691-7000.