How the CalPERS COLA works
Most CalPERS retirees have a 2% annual COLA, compounded and based on inflation (some employers contract for 3%, 4% or 5%). The adjustment starts in the second calendar year after you retire and takes effect each May 1. CalPERS also pays a separate Purchasing Power Protection Allowance to retirees whose benefit has lost a large share of its buying power over time.
What to expect in 2027
The 2027 COLA will be set from the 2026 inflation figure and take effect May 1, 2027.
What a COLA is worth over time
On a $3,000 monthly pension, a 2% simple increase adds $60 a month every year, so after 20 years the check is $4,200. A 2% compounded increase reaches about $4,460. A plan with no automatic increase stays at $3,000 unless lawmakers act, and at 3% inflation that check buys about 45% less after 20 years. Our COLA guide compares how other plans handle it.