Your cost-of-living adjustment (COLA) is calculated as a percentage of your pension benefit. The COLA percentage is cumulative and continues to increase each time a COLA increase for retirees is granted. Thus, as your pension increases, your COLA dollar amount will increase. Conversely, should your pension amount decrease, your COLA dollars will decrease as well.

For example, assume your cumulative COLA percentage is now 15 percent and your pension amount is reduced from $1,000 to $800 at age 65, based upon a smooth-out option selected by you at retirement. The dollar amount of your COLA will be reduced from $150 ($1,000 x 15%) to $120 ($800 x 15%), even though the cumulative COLA percentage remained the same.

Please note, each July 1, any budget approved COLA granted will apply to those who retired prior to July 1 of the previous year. COLAs shall be determined by reference to the increase if any, in the United States Average Consumer Price Index (CPI) for all items, as published by the Bureau of Labor Statistics of the United States Department of Labor.