The Cost of Living Adjustment (COLA) is 5.1% for 2023 and was approved by the Board of Fire and Police Pension Commissioners on April 6, 2023.
The COLA will be effective July 1, 2023, and all eligible pensioners and Deferred Retirement Option Plan (DROP) participants will receive an increase accordingly, beginning with the pension payment/DROP account deposit dated July 31, 2023.
- Tiers 1 & 2 retirees and beneficiaries will receive 5.1%. Tier 2 DROP participants will receive 3.0%.
- Tiers 3 & 4 retirees, beneficiaries, and DROP participants will receive up to 3.0%.
- Tiers 5 & 6 retirees, beneficiaries, and DROP participants will receive up to 3.0% and the remaining 2.1% will be stored in the COLA bank*, which can be applied in future years when the CPI is below 3%.
For new pensioners and DROP entrants in Tiers 3-6, the first year’s COLA is prorated based on the number of complete months since the pension effective date, therefore these members may not receive the full 3.0%.
*Must have retired or entered DROP with a pension effective date prior to June 2, 2023, in order to have an available COLA bank balance.
Consumer Price Index/Bureau of Labor Statistics
The COLA is based on the annual change in the Consumer Price Index (CPI) as published by the U.S. Bureau of Labor Statistics (BLS). Pursuant to the City of Los Angeles Charter/Administrative Code, the 2023 COLA was calculated based on the Los Angeles-Long Beach-Anaheim area using a 12-month period from March 2022 through February 2023.
How does this affect LAFPP Pensioners?
This is an example of how a monthly pension benefit of $6,386 would be affected by this year’s COLA of 5.1%:
For Tiers 1 – 2
If 5.1% of $6,386 = $325.69
($6,386 x 0.051)
Then the monthly pension benefit increases to $6,711.69
($6,386 + $325.69)
For Tiers 3 - 6
If 3.0% of $6,386 = $191.58
($6,386 x 0.030)
Then the monthly pension benefit increases to $6,577.58
($6,386 + $191.58)
For questions regarding the COLA, please contact the Retirement Services Section at (213) 279-3125, (844) 88-LAFPP, ext. 3125, or via email at RS@lafpp.com.
For detailed information on the calculation of the CPI, please visit the BLS website or call (202) 691-7000.