Tier 6 COLA Overview
IS THERE A MAXIMUM COLA PER YEAR?
Yes: Not to exceed an increase or decrease of 3%.
A COLA bank “stores” amounts over the 3% cap. In years in which the COLA is below 3%, the difference is deducted from the bank, if available.
In the event there is a negative COLA, the pension amount will not be reduced less than the member’s or qualified survivor’s original pension amount.
WHEN IS YOUR COLA APPLIED TO YOUR MONTHLY BENEFIT?
Upon retirement, your COLA bank begins with 0.0%. Each subsequent year’s COLA is applied to your benefit on July 1, not to exceed an increase or decrease of 3%.
When you become a pensioner, the first year’s COLA is prorated and based on the number of completed months you have been on the pension roll.
ARE YOU ELIGIBLE FOR A DISCRETIONARY COLA?
Once every three years, the City Council may grant a discretionary COLA. The discretionary COLA cannot exceed one-half the difference between the CPI and the actual increase granted during the preceding three years.
If the City Council grants a discretionary COLA, it is deducted from your COLA bank.
WHEN IS A COLA APPLIED TO A QUALIFIED SURVIVOR’S MONTHLY BENEFIT?
Your qualified survivor will continue to receive COLAs, according to the provisions of your plan, on July 1 each year.
For more information, please refer to the Tier 6 Pension Plan Summary Plan Description (SPD).