COLA vs benefit indexing

from the Department of Retirement Systems:

Posted on May 9, 2023

As a retiree, it’s important to know how your pension works. There are certain rules in place that allow your pension to grow over time with the cost of inflation. Two pension features we often get questions about are cost-of-living adjustments (COLAs) and benefit indexing.

All Plan 2 and 3 members receive a COLA every July. But not all plans or members are eligible for the inflation protection of benefit indexing. Let’s look at what these features are as well as the differences between the two.

Cost-of-living adjustment (for