You are not guaranteed to receive any increases in your monthly benefit; however, cost-of-living adjustments are sometimes granted based on factors which include the actuarial gains in the Retirement System. The increases are usually effective in July.
If granted, cost-of-living increases are usually calculated as a percentage increase in your monthly benefit. That percentage increase becomes a part of your monthly benefit, under all payment plans and the monthly benefit to be paid to your beneficiary, after your death, under Options 2, 3, and 6.
Under Option 4, any percentage increase you are granted before age 62 will be applied to the inflated benefit payments you are receiving at that time; however, upon reaching age 62 your benefit payments will be reduced to the original amount promised after age 62 plus the percentage increases (not the dollar amount of increases) granted before age 62.
COLA vs. one-time benefit supplement
At times, the General Assembly may determine that there are not enough budgetary funds available to cover the full liability that the retirement systems takes on when a COLA is granted. Instead, the General Assembly may choose to grant a one-time benefit supplement instead of a reoccurring increase. The media and other reports often call these COLAs, but they are not ongoing increases. A COLA will affect a retiree’s benefit payment going forward, while a one-time benefit is typically paid all at once and does not affect any future months’ payments.