SCERS Board to Approve COLA for 2022
UPDATED FEBRUARY 17, 2022–
At the February 16, 2022 Board of Retirement meeting, the SCERS Board approved the following Cost of Living Adjustment (COLA) levels effective April 2022, as recommended by the system’s actuary:
Miscellaneous Tier 1 and Safety Tier 1:
Retired April 1, 1976-March 31, 2022: 3%
Retired before April 1, 1976: 4%
Miscellaneous Tier 3, 4, 5 and Safety Tier 2, 3, 4:
Retired before April 1, 2022: 2%
There is no COLA for Miscellaneous Tier 2.
The new benefit amount will be reflected in retirees’ monthly payment for April. The COLA benefit is based on the rate of inflation and the unique factors of your benefit tier and retirement year that ensure the value of your money at retirement keeps up with the rate of inflation. In 2021, while there was inflationary growth in Northern California, the data suggests it was not as high as other parts of the country where it was reported to have reached the 7% range.
The CPI-U for the Bay Area (the index SCERS uses to determine the
COLA) showed an increase of 3.2% from 2020 to 2021. This is
likely due to Bay Area prices generally being higher over a
longer period of time, with the rest of the country experiencing
a higher pace of inflation to catch up.
Since 1982, the CPI-U for the Bay Area has outpaced the CPI-U index for a broader index that includes the Western states. This means the CPI-U for the Bay Area has led to higher cost of living increases, compounded over time, than other CPI indices. According to the Bureau of Labor Statistics, prices today for the Bay Area are more than 3.09 times (or 309%) the prices back in 1982-84 compared to 2.87 times (or 287%) for the Western states region.
Please note that the CPI-U Bay Area index may not reflect your personal inflation experience or how you spend your money but is a statistical average of many households’ spending patterns. The measure provides a consistent, reliable, and valid method for SCERS to determine the COLA the same way every year. SCERS cannot pick a more favorable CPI index from year to year to influence a different outcome.
For more COLA information, click here.