Salary Limitations/Cola Increase
In accordance with state law, the Department of Insurance (DOI) is to annually determine certain annuity limitations for use in benefit determinations by the Retirement Systems and Pension Funds operating under the Illinois Pension Code. The calculations include:
The retirement Cost of Living Adjustment ("COLA") applicable to Tier 2 participants, and
- The annual salary maximum applicable to Tier 2 participants.
- The annual increase to be used in determining the COLA for Tier 2 is derived from the change in the Consumer Price Index-Urban ("CPI-U") for the 12 months ending with the September proceeding each November 1. State statute requires that the DOI provide these calculations to impacted Retirement Systems and pension Funds by November 1 of each year.
For the State Employees' Retirement System (SERS) the annuity COLA and the increase in the annual salary maximum equals the lesser of 3% or half the CPI-U. The following table outlines the COLA to be applied and the maximum salary for Tier 2 annuity purposes by calendar year.