Your annual cost-of-living adjustment, or COLA, is based on the Consumer Price Index (CPI). We will calculate the COLA in mid-January and post it on our website. Be sure to keep an eye out for it!

MOSERS retirees and surviving beneficiaries receive annual cost-of-living adjustments (COLAs) to help offset the effects of inflation on their retirement benefits. COLAs allow retirees to maintain their purchasing power as inflation increases the cost of various items they buy.

What is the CPI?

The Federal Bureau of Labor Statistics calculates the CPI monthly. The CPI is used to measure the inflation rate and show larger economic trends annually. To learn more about the CPI, visit the Bureau of Labor Statistics’ Frequently Asked Questions (FAQs).

According to state law, MOSERS must use the CPI for All Urban Consumers (CPI-U) in our calculations. This is the most comprehensive measure of inflation in consumer goods and services, including food, housing, and transportation. CPI calculations are based on information from average households across the country. The impact of inflation on you personally may be more or less than the national average.

How is the COLA calculated?

Each January, MOSERS compares the average CPI for the calendar year just completed (2024) to the average CPI from the prior year (2023) to determine the percentage change between the two years. Retirees will not receive a COLA less than zero. (In other words, MOSERS does not decrease benefit amounts based on the CPI calculation.)

The COLA for retired general state employees is based on 80% of the percentage increase in the average CPI from one year to the next. The COLA can range from a minimum of 0% to a maximum of 5%.

In contrast, MSEP retirees employed before August 28, 1997, receive a minimum 4% COLA until they reach their COLA cap. This happens when accumulated COLAs equal 65% of their initial base benefit. After reaching the cap, their COLA will be calculated like other retirees and will range from 0% to 5% each year, depending on the increase in the Consumer Price Index.

At MOSERS, our COLAs compound. This means the annual benefit increase is calculated based on the original benefit plus any prior benefit increases. In comparison, other state retirement systems may apply a simple COLA, where the benefit increase for each year is calculated based on the original benefit amount at the time of retirement.

When are COLAs payable?

COLAs are payable on the anniversary of your retirement date except for:

• Retired members who converted from MSEP to MSEP 2000 during the conversion window in 2000 will receive their COLA in July.
• Retired members who elected BackDROP will receive their COLA on the anniversary of their BackDROP date.
• Retired inactive-vested members of MSEP 2011 will receive their first COLA on the second anniversary of their retirement (rather than the first anniversary).
• Retired legislators who took office after July 1, 2000, will receive an adjusted benefit according to the increase in pay for an active member of the general assembly. No other COLAs will be provided.
• Retired statewide elected officials who took office after July 1, 2000, will receive an adjusted benefit according to the increase in pay for an active member in that office. No other COLAs will be provided.

We will send you a notice in your Document Express online mailbox during the month you receive your COLA.

See our Cost-of-Living Adjustments page for more information. To learn more about various types of COLAs used by other retirement systems, see the recent NASRA Issue Brief: Cost-of-Living Adjustments on the National Association of State Retirement Administrators’ website.