TCERA Members and continuance beneficiaries are eligible for cost of living adjustments (COLA) to regular and disability retirement benefits. Tier 1 members are eligible to receive up to a maximum of 3% COLA per year while Tiers 2-4 are eligible to receive up to a maximum of 2% COLA per year. Actual COLA amounts are calculated based on changes in the Consumer Price Index (which may be a positive or negative amount) as of December 31st of the previous year and are rounded to the nearest ½ of a percent. Applicable COLA becomes effective April 1st of each year and is first paid in the pension disbursement dated April 30th. COLA is applied only to the basic benefit plus the current COLA amount. Any supplemental benefits that may be payable to a member or beneficiary are not eligible for COLA. COLA in any amount is not guaranteed for any given year and may be a positive or negative adjustment.
In years when the Consumer Price Index rises more than the maximum percentage for the cost of living increase allowed for each tier, the difference is carried over (banked). In subsequent years, if the Consumer Price Index increase rises less than the maximum percentage for the maximum annual cost of living adjustment for each tier, any carryover banked for a member will be used to increase the adjustment up to the maximum allowed for each tier.