For 2022, TVARS will provide a 3.5% COLA for eligible retirees and beneficiaries, the highest COLA since 2009 as a result of significant increases in the cost of many consumer goods during 2021.
The TVARS Rules and Regulations provide that eligible retirement benefits (pension and supplemental benefits) will receive a COLA based on an inflation measure, which is the Consumer Price Index – All Urban Consumers (CPI-U) – an index maintained by the U.S. Labor Department that measures the price changes in a broad group of various goods and services purchased by consumers. Under the TVARS Rules, the COLA is calculated as the percentage change in the average CPI-U for the period of November 2019 – October 2020 to the period November 2020 – October 2021 (3.75%) minus 0.25%. Eligible retirees and beneficiaries will see the increase in checks beginning January 31, 2022.
While Social Security has recently announced one of its highest COLAs in recent years, the TVARS Rules use a different inflation measure and period and COLA formula than Social Security. Some of these differences for 2022 include the following:
- TVARS COLA is based on the CPI-U and Social Security’s COLA is based on the CPI-W
- TVARS uses a 12-month average of the change from November to October and Social Security uses a 3-month average from July to September
- Inflation spiked later in the year and was high during the 3-month period that Social Security uses for their calculation
While the TVARS COLA and Social Security COLA have generally tracked each other over time, based on these differences, the inflation measure used for the calculation of the TVARS COLA will sometimes be higher or sometimes lower than the Social Security year-to-year.