The Cost of Living Adjustment (COLA) is 2.5% for 2019 and was approved by the Board of Fire and Police Pension Commissioners on March 21, 2019. The COLA will be effective July 1, 2019, and all eligible pensioners and DROP participants will receive an increase accordingly, beginning with the pension payment dated July 31, 2019. For new pensioners or DROP entrants in Tiers 3-6, the first year’s COLA is prorated based on the number of completed months since the effective pension date.
- Tiers 1 and 2 will receive 2.5%.
- Tiers 3 and 4 will receive up to 2.5%.
- Tiers 5 and 6 will withdraw and apply 0.5% from their COLA bank balance of 0.6% and receive up to 3.0% (NOTE: Must have retired or entered DROP prior to June 2, 2018 in order to have 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 Bureau of Labor Statistics (BLS). The 2019 COLA was calculated based on the Los Angeles-Long Beach-Anaheim area using a 12-month period from March 2018 through February 2019.
How does this affect LAFPP Pensioners?
This is an example of how a monthly pension benefit of $5,890 would be affected by this year’s COLA of 2.5%:
For Tiers 1 through 4
If 2.5% of $5,890 = $147.25
($5,890 x 0.025)
Then the monthly pension benefit would be increased to $6,037.25.
($5,890 + $147.25)
For Tiers 5 and 6 with available COLA bank
If 3.0% of $5,890 = $176.70
($5,890 x 0.030)
Then the monthly pension benefit would be increased to $6,066.70.
($5,890 + $176.70)
Tiers 5 and 6 will have 0.1% remaining in their COLA bank.
Questions?
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 or call (202) 691-7000.