Who is Eligible to Receive a “4-Year” COLA in 2021?

Eligible retirees of Employees’ Retirement System of Rhode Island (ERSRI) and Municipal Employees’ Retirement System (MERS) employers will receive a “4-Year” Cost of Living Adjustment (COLA) in 2021. Eligibility to receive a COLA depends on the type of COLA that an employer elected to provide and when the COLA went into effect.

The “4-Year” COLA is provided to eligible retirees who are not currently receiving an Annual COLA. Individual MERS plans which are 80% or more funded that currently provide an Annual COLA will continue to provide an Annual COLA on the first $27,608 of a retiree’s pension benefit.

Per Rhode Island law, the “4-Year” COLA is calculated based on equal parts of 50% of investment performance minus 5.00%, and 50% of inflation. The investment performance of the pension fund as calculated by ERSRI’s actuary is 5.75%. The Consumer Price Index for All Urban Consumers, which measures inflation, is calculated at 1.37% (as of March 2022).

As a result, the 2021 “4-Year” COLA for eligible retirees who retired on or before June 30, 2015 is 1.06% on the first $33,130 of an eligible member’s pension benefit, which is a maximum of $351.18.

For eligible retirees who retired after June 30, 2015 the COLA is 1.06% on the first $27,608 of the member’s pension benefit, which is a maximum of $292.64.

To learn more about the “4-Year” COLA, who is eligible, how it is calculated, and when it will be paid, please click on the appropriate employer group below:

State Employees, Teachers, Judges And State Police Retirees

Municipal Employees’ Retirement System Retirees

Municipal Employees’ Retirement System: Police and Fire Retirees