A COLA is a Cost of Living Adjustment. Not all employers offer a COLA.
On Nov. 18, 2011, the Rhode Island General Assembly enacted into law the Rhode Island Retirement Security Act of 2011 (RIRSA). RIRSA suspends a COLA for all State Employees, Teachers, Judges, State Police BHDDH Nurses, and Correctional Officers until the plans’ funding level for all groups, calculated in the aggregate, exceeds 80 percent.
For MERS, COLAs are suspended until the funding level of the individual plan exceeds 80 percent—MERS plans are not aggregated. Depending on economic factors, for members with a suspended COLA, an interim COLA may be calculated and awarded every four years during the suspension period.
Under Rhode Island law, the COLA is calculated based on equal parts of 50% of investment performance minus 5.00%, and 50% of inflation, as measured by the Consumer Price Index for All Urban Consumers.