The COAERS retirement plan does not include either a cost-of-living adjustment (COLA) or extra one-time payments.

The cost of living goes up but your retirement benefit does not continue to increase after you retire. One of the most-often asked questions at the Member Summit is why not?

Lifetime Benefit

Your COAERS benefit is designed to be a lifetime benefit and a stable foundation for your retirement income. Whether you live into your nineties or beyond, your benefit does not end. Contributions to the retirement system are structured to finance your lifetime benefit, without consideration of a future adjustment to your monthly benefit payment.

While retirement plans across the country vary, most plans that do include a COLA have smaller multipliers, meaning that retirement payouts are lower over the long term.

Based on a Formula

Your COAERS benefit is based on a formula that considers your years and months of service, final average salary, and a multiplier. The formula does not include any other economic data such as inflation, interest rates, or market performance.

The Fund Carries Market Risks

Workers who have a 401-k or other plan, including the Deferred Compensation plan, notice their balances rise and fall depending on the portfolio investments and market conditions. As a 401-a plan, COAERS bears all risks, meaning that retirees will never outlive their money nor will their benefits ever fall.

The three-legged stool approach (COAERS retirement, Social Security, and personal savings/investments) is still your best bet.

For retirees who feel the pinch of not receiving a COLA, we recommend:

Review your expenses, savings, and your budget regularly

• Prioritize essential expenses like housing, food, and healthcare
• Look for areas to reduce discretionary spending and negotiate better deals with bill providers
• Consider keeping emergency savings in high-yield savings accounts 

Consider ways to increase and/or supplement your income

• Consider part-time or freelance work, downsize your home, sell unused items or monetize hobbies
• Explore eligibility for local community assistance programs and public benefits like SNAP or Medicaid
• Check if you qualify for caregiver compensation through Medicaid or VA programs

Manage your healthcare costs proactively

• Review your Medicare Advantage plan and health insurance plans annually during open enrollment
• Seek help from benefits counselors through local community organizations, such as Foundation Communities or Area Agencies on Aging

With proactive planning and support, you can navigate rising costs and maintain financial stability.

Transparency

TEXPERS (Texas Association of Public Employee Retirement Systems), NASRA (National Association of State Retirement Administrators) and NCPERS (National Conference on Public Employee Retirement Systems) all work with public pension plans. All Texas Plans are overseen by the Texas Pension Review Board, which publishes data on all systems on their website www.prb.texas.gov.

If you are a retiree, please know that your current monthly benefit payment is secure and, in fact, protected from reduction by the Texas statute; however, there is no guarantee that your benefit will increase in the future. If you are an active employee contemplating retirement, you should remember that COLAs are not guaranteed or automatic, and you should factor this into your retirement planning and decisions.

 

Disclaimer:

This page offers educational content and links to nonprofit and public service websites selected to support the financial wellbeing of COAERS members. These resources are provided for informational purposes only. COAERS does not endorse or guarantee the accuracy, security, or services of any external site. We encourage users to exercise discretion when accessing third-party content. Resources have been curated in accordance with COAERS’ Social Media policy .