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The 2021 COLA Rate
The COLA rate for 2021 is 0.987%. We calculate it every year in mid-January. This COLA rate applies to:
- All retired members of MSEP 2000 and MSEP 2011
- MSEP retirees who have reached their 65% COLA cap
- MSEP retirees first employed on or after August 28, 1997
If you were employed before August 28, 1997, and retired under the MSEP, you will get a COLA of at least 4% each year (maximum 5%) until you reach your COLA cap. You reach the COLA cap when the sum of your COLAs equals 65% of your initial base benefit amount. After reaching your COLA cap, your annual COLA will be equal to 80% of the percentage increase in the average Consumer Price Index (CPI) from one year to the next, which, as noted above, is 0.987% for 2021.
The purpose of a COLA for any type of pay or retirement benefit is to help you cope with inflation. COLAs help you maintain your purchasing power as inflation increases the cost of various items you buy. See the article, The 2021 COLA is Here, and the COLA page on our website for more information.
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