Cost of Living Adjustments

A Cost of Living Adjustment (COLA) is provided to SFERS’ retired members to help their post-retirement income keep pace with inflation (the cost of living in the local area).

Retired members may receive up two COLAs from SFERS each year: a Basic COLA and a Supplemental COLA.

Basic COLA

The Basic COLA is an automatic adjustment to your monthly retirement benefit on July 1st of each year
The Basic COLA is calculated based on the gross amount of your retirement benefit on June 30th and is paid to eligible members on the allowance dated July 31st
When paid, you will receive an adjustment to your monthly benefit amount, equal to the annual percentage increase in the local Consumer Price Index (CPI is a measurement of inflation) rounded to the nearest 1% (up to a maximum of 2%)
In years when the CPI increase is more than 2%, the increase above the maximum 2% is accumulated in a “COLA Bank” for those members eligible for the Basic COLA in that year
In years when the CPI increase is less than 2%, the Basic COLA can be paid entirely or in part (to eligible members) from the COLA Bank to bring the Basic COLA up to the maximum 2%

Supplemental COLA

An additional adjustment may be paid along with the Basic COLA, following years when there are sufficient excess investment earnings on the Retirement Fund. This additional adjustment is called the Supplemental COLA. The Supplemental COLA is not payable to all retirees when the Retirement System is less than fully funded based on the market value of assets.

The Supplemental COLA is effective July 1 in years when it is paid
The Supplemental COLA can be paid in increments of 0.5% up to a maximum of 1.5% if the Basic COLA is 2%
When combined with the Basic COLA, the Supplemental COLA can increase your monthly retirement benefit up to a maximum of 3.5% over the amount of your previous June 30th retirement allowance
In any year that a Supplemental COLA is not paid, members hired before January 7, 2012 will continue to receive the Supplemental COLAs paid in previous years. For members hired on or after January 7, 2012, retirement allowances will revert to the level they would have been if Supplemental COLA adjustments had never been made.
When paid, the Supplemental COLA is always paid in the allowance dated February 28th (or 29th) in the year following the July 1st effective date
If you are eligible to receive the Supplemental COLA, your February allowance will include seven months of retroactive Supplemental COLA pay (July through January), plus the regular February allowance which includes the Supplemental COLA increase
Your allowance dated March 31st will reflect the actual amount of your monthly allowance (includes Basic and Supplemental COLAs that were effective July 1st of the prior year)

The COLA Bank cannot be used to fund the Supplemental COLA.

If you retired under a SFERS’ Safety Old Plan, you may receive an automatic adjustment to your monthly retirement benefit on July 1st of each year known as the Basic COLA. For most current Old Plan retirees, the Basic COLA is determined by selecting the higher of:
1. The average of the maximum rates of compensation paid to safety officers in cities across the State of California with a population of 350,000 or greater (per a survey conducted by the Board of Supervisors based on federal census data); or
2. The rate of salary increase stated in the Memorandum of Operation (MOU)

For safety members who retired before July 1, 1975 (Proposition H members), the Basic COLA is based on 50% of the percentage increase in the salary of the rank or position from which he/she retired.

For safety members who retired on or after July 1, 1975 (Proposition M members), the Basic COLA is based on 50% of the actual dollar increase in the salary of the rank or position from which he/she retired

While the Basic COLA is effective July 1^st of each year, it is paid in the October 31^st monthly allowance