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Who is Eligible to Receive a "4-Year" COLA in 2021

Eligible retirees of Employees’ Retirement System of Rhode Island (ERSRI) and Municipal Employees’ Retirement System (MERS) employers will receive a "4-Year" Cost of Living Adjustment (COLA) in 2021. Eligibility to receive a COLA depends on the type of COLA that an employer elected to provide and when the COLA went into effect.

The "4-Year" COLA is provided to eligible retirees who are not currently receiving an Annual COLA. Individual MERS plans which are 80% or more funded that currently provide an Annual COLA will continue to provide an Annual COLA on the first $27,608 of a retiree’s pension benefit.

Per Rhode Island law, the ‘4-Year’ COLA is calculated based on equal parts of 50% of investment performance minus 5.00%, and 50% of inflation. The investment performance of the pension fund as calculated by ERSRI’s actuary is 5.75%. The Consumer Price Index for All Urban Consumers, which measures inflation, is calculated at 1.37%. 

As a result, the 2021 "4-Year" COLA for eligible retirees who retired on or before June 30, 2015 is 1.06% on the first $33,130 of an eligible member’s pension benefit, which is a maximum of $351.18. 

For eligible retirees who retired after June 30, 2015 the COLA is 1.06% on the first $27,608 of the member’s pension benefit, which is a maximum of $292.64.

To learn more about the "4-Year" COLA, who is eligible, how it is calculated, and when it will be paid, please click on the appropriate employer group below:

State Employees, Teachers, Judges and State Police Retirees
Municipal Employees' Retirement System Retirees (General)
Municipal Employees' Retirement System: Police and Fire Retirees


Who is Eligible to Receive an Annual COLA in 2021

Members of fifty-eight municipal (MERS) pension plans will receive cost-of-living adjustments (COLA) in 2021.  Click here for a list of MERS plans providing a COLA in 2021.

All members of these 58 plans who retired before June 30, 2012 and were previously receiving or eligible for a COLA - will receive a COLA beginning the month following their retirement date in 2021.

General MERS members of these plans who retired after June 30, 2012 – will be eligible to receive a COLA three years after your retirement date or at their Social Security Normal Retirement Age, whichever is later.
 
Police and Fire MERS members of these plans who retired between July 1, 2012 and June 30, 2015 – will be eligible to receive a COLA three years after their retirement date or when they reach age 55, whichever is later. 

Police and Fire MERS members of these plans who retired after June 30, 2015 - will be eligible to receive a COLA three years after their retirement date or when they reach age 50, whichever is later.
 
Teachers’ Survivor Benefits:  Current eligible beneficiaries of the Teachers’ Survivor Benefit receive the same COLA granted to members of Social Security. The increase, which begins in January 2021 is 1.3%, as announced by the Social Security Administration in October 2020.

How is the COLA calculated?

Eligible retirees of the 58 MERS plans will see an increase of 1.06% on the first $27,608 of their annual pension benefit for calendar year 2021.
 
The Teachers’ Survivor Benefits plan COLA is determined by the Social Security Administration.
 
How is it determined which plans get COLAs and which plans do not?

Municipal plans that are part of MERS, and have adopted a COLA provision, provide a 2018 COLA when the actuary determines the individual plan is at least 80% funded as of June 30, 2020.
 
Plans that have chosen not to offer a COLA and plans that are not 80% funded do not provide a COLA to members.

Recipients of the Teachers' Survivor Benefit (TSB) will receive COLA as determined by the Social Security Administration (SSA).  There may be years that the SSA will not grant a COLA. 

 State Employees, Teachers, Judges and State Police Retirees

State employees, teachers, judges and state police retirees who were receiving a COLA prior to the June 30, 2012, will receive a "4-Year" COLA in 2021. The COLA will be paid the month following the member’s retirement date.
 
State police retirees who retired before June 30, 2012 who were not receiving a COLA prior to June 30, 2012, will receive the "4-Year" COLA the month following the third anniversary of the member’s retirement date.
 
State employees, teachers and judges retirees who retired between October 1, 2009 and June 30, 2012 who were not receiving a COLA, will receive the "4-Year" COLA the month following the third anniversary of the member’s retirement date or age 65, whichever is later.
 
State police retirees who retired after June 30, 2012 and before or on June 30, 2015, will receive the "4-Year" COLA the month following the three year anniversary of the member’s retirement date or age 55, whichever is later. The "4-Year" COLA is applied to the first $33,130 of a pension. 

State police retirees who retired after June 30, 2015 will receive the "4-Year" COLA the month following the three year anniversary of the member’s retirement date or after reaching Social Security Normal Retirement Age (SSNRA), whichever is later. The "4-Year" COLA is applied to the first $27,608.
 
State employees, teachers and judges retirees who retired after June 30, 2012 become eligible to receive a ‘4-Year’ COLA after reaching Social Security Normal Retirement Age (SSNRA) or the three-year anniversary of the member’s retirement date, whichever is later. The 4-year COLA is applied to the first $33,130 of a pension if you retired on or before June 30, 2015 and if you retired after June 30, 2015 it is applied to the first $27,608.  In both cases it will begin in the month following the 3-year anniversary date of the member’s retirement or SSNRA, whichever is later.

Municipal Employees’ Retirement System (MERS) Retirees (General)

Not all MERS employers provide a COLA to all retirees. Eligibility to receive a COLA depends on the type of COLA the member’s employer elected to provide and when that COLA went into effect. Members who already receive an Annual COLA are not eligible to receive a "4-Year" COLA.
 
  • Retirees of the Municipal Employees’ Retirement System (MERS) who retired before June 30, 2012 AND whose Annual COLA is currently suspended are eligible for the "4-Year" COLA. The COLA is applied to the first $33,130 of a pension and will begin in the month following the member’s date of retirement.
  • Additionally, General MERS retirees who retired before June 30, 2012 and did not receive a COLA prior to June 30, 2012, but were contributing at 7% are also eligible for the ‘4-Year’ COLA. The COLA is applied to the first $33,130 of the member’s pension benefit and will begin in the month following the member’s date of retirement.
  • General MERS retirees who retired after June 30, 2012 and were contributing at 2% become eligible for the "4-Year" COLA after reaching Social Security Normal Retirement Age (SSNRA) or the three-year anniversary of the member’s retirement date, whichever is later. The COLA is applied to the first $33,130 if you retired on or before June 30, 2015 and if you retired after June 30, 2015 it is applied to the first $27,608.  In both cases it will begin in the month following the 3-year anniversary of the date of the member’s retirement or the SSNRA, whichever is later.

Municipal Employees’ Retirement System (MERS) Police and Fire Retirees 

Not all MERS public safety employers provide a COLA to all retirees. Eligibility to receive a COLA depends on the type of COLA the employer elected to provide and when that COLA went into effect.  Members who already receive an Annual COLA are not eligible to receive a ‘4-Year’ COLA.
 
Police and Fire retirees who retired before June 30, 2012 and whose Annual COLA is currently suspended are eligible for the ‘4-Year’ COLA. The COLA is applied to the first $33,130 of a member’s pension and will begin in the month following the date of retirement.

  • Police and fire retirees who retired from an employer that has elected to provide a COLA AND who retired between July 1, 2012 and June 30, 2015 become eligible for the "4-Year" COLA after reaching age 55 or the three-year anniversary of the member’s retirement date, whichever is later. The COLA is applied to the first $33,130 of the member’s pension and will begin in the month following the date of retirement or 55th birthday, whichever is later.
  • Police and fire retirees who retired from an employer that has elected to provide COLAs AND retired after June 30, 2015 become eligible for the ‘4-Year’ COLA after reaching age 50 or the three-year anniversary of the member’s retirement date, whichever is later. The COLA is applied to the first $27,608 of the member’s pension and will begin in the month following the anniversary of the member’s date of retirement or 50th birthday, whichever is later.