Cost-of-Living Adjustments (COLA), up to a 2 percent increase, are given on April 1st of each year based on the increase or decrease in the Bureau of Labor Statistics’ Consumer Price Index (CPI) as of January 1st of each year (Government Code section 31870). The COLA is always rounded to the nearest one-half percent and will never exceed 2 percent. For example, if the CPI goes up by 1.34 percent, SBCERA’s retirees and eligible beneficiaries receive a 1.5 percent COLA.
On Thursday, February 6, 2020, the SBCERA Board of Retirement approved a 2.00% cost-of-living adjustment (COLA) for all SBCERA retirees and eligible beneficiaries.
Cost-of-living adjustments are applied on April 1st of each year based on the increase or decrease in the Consumer Price Index (CPI) as of January 1st of that year, pursuant to Government Code section 31870. A cost-of-living adjustment is provided up to a maximum of 2.00% per year.
The current Bureau of Labor Statistics Consumer Price Index for All Urban Consumers, for the Riverside-San Bernardino-Ontario area as of November 30, 2019 is 2.85% (106.573/103.616 x 100 -100), rounded to the nearest one-half percent is 3.00%. To find this figure, go to the Bureau of Labor Statistics page for the Riverside-San Bernardino-Ontario Metropolitan Statistical Area. For a background on cost-of-living adjustments, see the Frequently Asked Questions (FAQ) regarding Cost-of-Living Adjustments.
SBCERA retired members and eligible beneficiaries will be affected in the following manner:
Those members and eligible beneficiaries who have a benefit effective date on or before April 1, 2020 will receive a 2.00% COLA effective April 1, 2020 and their accumulated COLA bank will increase by 1.00%.
Typically, each year the Board of Retirement reviews and approves any applicable COLA at its February Board meeting. The COLA does compound each year.
The COLA, if approved, is for all eligible retirees and beneficiaries including those earning service retirement benefits, disability retirement benefits, continuances, optional death allowances and/or modified optional death allowances. Active members who retire on or before April 1st of that year are also eligible for the COLA.
Change in CPI
The COLA Bank
Since members can only receive a maximum of a 2 percent increase, when the change is more than 2 percent or it goes down, the change is accumulated or “banked” to be met by the increases or decreases in future years. Therefore, these excess amounts can be applied in future years when the CPI change is below 2 percent. No CPI decrease will ever reduce your monthly retirement benefit below the base amount received as of your effective retirement date.
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