Tier 1/Tier 2 COLA Overview
Is there a maximum COLA per year?
No. COLA increases/decreases are uncapped.
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?
Your benefit is adjusted on July 1 of each year to reflect the change in the cost of living published by the Bureau of Labor Statistics.
- If you have 25+ years of service (or a Service-Connected Disability Pension), your COLA is applied to your benefit on July 1 following the effective date of your pension.
- If you have <25 years of service, your COLA is applied on July 1 following the date on which you would have had 25 years of service.
- If you have a Nonservice-Connected Disability Pension, your COLA is applied on July 1 following the date on which you had (or would have had) 25 years of service, or the fifth anniversary of the effective date of your pension, whichever is earlier.
Are you eligible for a discretionary COLA?
No
When is a COLA applied to a qualified survivor’s monthly benefit?
- In the event of an active member’s service-connected death, the COLA is applied to the qualified survivor’s benefit on July 1 following the effective date of the qualified survivor’s pension.
- In the event of an active member’s nonservice-connected death while eligible for a service pension, the COLA is applied on July 1 following the date the member had (or would have had) 26 years of service, or the fifth anniversary of the qualified survivor’s pension, whichever is earlier.
- In the event of a retired member’s death after a service-connected or nonservice-connected disability, the COLA is applied on July 1 following the date on which you had (or would have had) 26 years of service, or the fifth anniversary of your pension, whichever is earlier.
For more information, please refer to the Tier 2 Pension Plan Summary Plan Description (SPD).
Referenced Documents:
