The caps
| Part of your check | Fund meets its return | Fund misses |
|---|---|---|
| ACPS: service through June 30, 2011 | 3% | 3% |
| ACPS: service from July 1, 2011 | 2.5% | 1% |
| RCPB: all service | 2.5% | 1% |
"Meets its return" means the pension fund earned at least its assumed investment return for the prior calendar year. The price measure is: annual average CPI-U (U.S. city average, all items, not seasonally adjusted) for the calendar year ending Dec. 31 of the preceding fiscal year, compared with the year before.
Your first COLA
A member must be retired at least one year as of July 1. By statute, the first COLA is on the second July 1 after the day before the allowance's effective date (the first day of the month of the first payment). ACPS Handbook p. 33, Cost-of-Living Adjustments; RCPB Handbook p. 31; ACFR FY2025 p. 166
- Retire July 1, 2026: first COLA July 1, 2027.
- Retire August 1, 2026: first COLA July 1, 2028.
What it could add
The handbooks' full-pension examples, if prices rise at least 3% every year (so the caps apply). That's the most the COLA could be.
| July 1 | ACPS, fund meets | ACPS, misses | RCPB, fund meets | RCPB, misses |
|---|---|---|---|---|
| Start | $3,432 | $3,432 | $3,080 | $3,080 |
| 2027 | $3,525 | $3,495 | $3,157 | $3,111 |
| 2028 | $3,621 | $3,560 | $3,236 | $3,142 |
| 2029 | $3,719 | $3,627 | $3,317 | $3,173 |
| 2030 | $3,820 | $3,695 | $3,400 | $3,205 |
| 2031 | $3,923 | $3,764 | $3,485 | $3,237 |
ACPS example: about 42% of the check is from service before July 2011 (our assumption: joined 1990, retiring 2026). Lower inflation means smaller raises.
When prices fall
A year with a negative CPI change gets a 0% COLA; the negative amount is carried forward and subtracted from the next positive year or years until fully applied. ACPS Handbook p. 33, Cost-of-Living Adjustments; RCPB Handbook p. 31; ACFR FY2025 p. 166; SPP §29-402(f)
What the handbooks say
- A cost-of-living adjustment (COLA) may be added each July, based on the Consumer Price Index. You must have been retired at least one year as of July 1 to get it.ACPS Handbook p. 33, Cost-of-Living Adjustments; RCPB Handbook p. 31
- ACPS retirees get a two-part COLA: up to 3% on the part of the benefit earned through June 30, 2011, and up to 2.5% (or 1% in years the pension fund misses its assumed return) on the part earned after.ACPS Handbook p. 33; SPP §29-406, §29-408
- RCPB retirees' COLA is capped at 2.5% in years the fund meets its assumed return and 1% in years it doesn't.RCPB Handbook p. 31; SPP §29-408
- When CPI falls, the COLA is zero, and the drop is subtracted from the next positive year or years.ACPS Handbook p. 33; SPP §29-402(f)
- COLAs compound: each year's increase applies to the allowance plus earlier COLAs.SPP §29-402(d)(2), §29-406(b), §29-408(b)
Questions
When do TPS COLAs happen?
Each July 1. You must have been retired at least a year by that July 1.
How big is the COLA?
It follows the Consumer Price Index, up to a cap. ACPS: up to 3% on the part of your check from service before July 1, 2011, and up to 2.5% (or 1%) on the rest. RCPB: up to 2.5%, or 1% in years the fund misses its assumed return.
What if prices fall?
No COLA that year. The drop is subtracted from the next year or years when prices rise.
Do COLAs compound?
Yes. Each raise applies to your check including earlier raises.
Source: SRPS Benefits Handbooks: Teachers' Pension System (Alternate Contributory Pension Selection; Reformed Contributory Pension Benefit), Revised April 2021, ACPS Handbook p. 33; RCPB Handbook p. 31; ACFR FY2025 p. 166; SPP §§ 29-401, 29-402, 29-406, 29-408. Last reviewed .