Your co-worker appears to be mixing up two different topics. We are glad you came to MOSERS for clarification! MOSERS retirees and surviving beneficiaries receive an annual cost-of-living adjustment (COLA) to help offset the effects of inflation on their retirement benefits. COLAs allow retirees to maintain their purchasing power as inflation increases the cost of various items they buy.

The COLA for retired general state employees is based on 80% of the percentage increase in the average CPI from one year to the next. The COLA can range from a minimum of 0% to a maximum of 5%.

However, MSEP retirees employed before August 28, 1997, receive a minimum 4% COLA (maximum 5%) until they reach their COLA cap. This happens when accumulated COLAs equal 65% of their initial base benefit. After reaching the cap, their COLA will be calculated like other retirees and will range from 0% to 5% each year, depending on the increase in the Consumer Price Index.

Example: $1,000 (Initial Base Benefit) x .65 (65%) = $650. The hypothetical member in this example would reach their COLA Cap when their monthly benefit equaled $1,650. Going forward, they would continue to receive an annual COLA between 0 and 5%.

The COLA section on your Annual Benefit Statement contains an estimated date you will reach the COLA cap. Typically, members reach the COLA cap around 12 to 13 years after retirement.

See our Cost-of-Living Adjustments page for more information.

To get back to your co-worker, the significance of 26 years of service has to do with the maximum subsidy members get toward their medical insurance premiums in retirement. It has nothing to do with COLAs from MOSERS.