LACERS BOARD UPDATE
By Michael R. Wilkinson, LACERS Commissioner
Email: MikeWilkinson4LACERS@gmail.com
T
he LACERS Board has set a 3 percent Cost-of-Living Adjustment (COLA) for Tier 1 and Tier 1 enhanced members starting July 2025. They also requested a 2.6 percent discretionary COLA from the City Council to offset inflation losses.
The Los Angeles area Consumer Price Index was 3.3 percent, which resulted in the maximum 3 percent COLA for Tier 1 and Tier 1 Enhanced retirees, and .3 percent going to a COLA bank. The bank can be used to increase the COLA in future years when the CPI drops below 3 percent. Tier 3 members receive a 2 percent COLA and no banking.
There is no longer a Tier 2, and Tier 3 is made up of members who started with the City on or after Feb. 21, 2016, unless they qualified for Tier 1 membership.
The LACERS board made similar requests for a discretionary COLA in April 2023 for an additional 2.6 percent, and March 2024 for an added 2.85 percent, but the City Council did not act on the requests.
I generally get some questions about why some other pension system or Social Security has a different COLA. The answer is that each plan has its own rules to determine the CPI and has different measuring dates and methods. Some use a specific month to measure the CPI while others use an average for the entire year. The result is that sometimes the LACERS COLA will be less than that of another plan, but sometimes it is more.
