For 2023, the COLA for eligible retirees and beneficiaries will be 6%.
The TVARS Rules and Regulations provide that eligible retirement benefits (pension and supplemental benefits) will receive a COLA benefit based on a formula using 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 2020 – October 2021 to the period November 2021 – October 2022 (8.04%) minus 0.25%, with a cap of 6%. Eligible retirees and beneficiaries will see the increase in checks beginning January 31, 2023.
This is the first time in over 30 years the cap in the formula has determined the maximum COLA benefit (prior to 2016 the cap was 5%). The 6% maximum in the formula provides a high level of vested COLA benefit during this current period of higher inflation while also helping to protect TVARS’ ability to pay all retirement benefits to retirees and beneficiaries over the life of the System.