CALPERS ANNOUNCES COLAs FOR 2019

CalPERS has announced cost-of-living increases for 2019. These will appear in pay warrants or direct deposit notices beginning May 1, 2019.

For retirees from the the California State University System, the COLAs for 2019 will be as follows:

For those who retired in 2004 or earlier: 2.00%

For those who retired in 2005 through 2015: 2.44%

For those who retired in 2016 through 2017: 2.00%

Those who retired in 2018 or later are not yet eligible for a COLA.

The CalPERS calculation of the COLA percentage for any given year is a four-step process based on the urban consumer price index (CPI):

Step 1

CalPERS calculates the actual rate of inflation, based on your retirement year.

(Current CPI - Retirement Year CPI) / Retirement CPI = Rate of Inflation

Step 2

CalPERS then calculates the compounded contracted COLA Provision percentage you would have received had the CPI increased by the contracted COLA percentage each year. For the CSU and most state agencies that is 2.0%.

First year of COLA, 2% (no compounding)

Second year of COLA, 2% =  2% x 1.02% + 2% = 4.04%

Third year of COLA, 2% = 4.04% x 1.02% + 2% = 6.12%

and so on for each additional year you have been retired.

Step 3

CalPERS then uses the lesser of the two numbers from steps 1 and 2 to determine your COLA factor.

Step 4

Your base year retirement amount x COLA Factor = COLA amount added to your base year amount.