COLA and STAR COLA

COLA
Retired SDCERA members are eligible for an annual Cost of Living Adjustment (COLA), up to a 3% increase. Because inflation can erode retirement benefits over the years, COLA is an important benefit available to you as an SDCERA member, helping your benefit to keep its value.

Each year the Board of Retirement determines the annual COLA based on the Consumer Price Index for the San Diego area. The applicable COLA is then effective April 1 of each year, and is paid beginning with the April retirement payment.

If your retirement date occurs before April 1, you are eligible for the current year’s COLA. Members who retire on April 1 (or after) wait until the following year to receive any applicable COLA.

COLA Bank
Because the maximum allowable COLA is 3%, any increase in the CPI beyond that maximum is placed in a COLA bank. This amount can be applied in a future year, when the CPI change is less than the maximum. For example, if the CPI increases only 2%, members with a COLA bank of 1% or more would receive a 3% COLA that year (2% based on the CPI and 1% from their COLA bank).

Supplemental Targeted Adjustment for Retirees (STAR) COLA
Some retirees experience a more substantial loss in retirement benefits due to inflation. The Supplemental Targeted Adjustment for Retirees (STAR COLA)--adds a supplemental cost of living payment to the monthly retirement or survivor payments for eligible retirees. To be eligible, you must be a retiree who had lost more than 20% of you purchasing power as of April 1, 2007

If you are eligible for the STAR COLA, it is a permanent part of your monthly retirement benefit and will be eligible for the cost of living adjustment of up to 3% each year.