Each July 1, eligible retirees and beneficiaries may receive a permanent benefit increase (PBI) funded only by excess investment earnings: the share of the actuarial value of assets' yield above 8%. The total increase cannot exceed 4% in aggregate; under 1% of retiree liability, no increase. The increase is a dollar amount per year of credited service, not a percentage of each benefit. A.R.S. 38-767
Who gets it
Retired member or beneficiary who was receiving benefits on or before July 31 of the previous calendar year, for a member whose membership commenced before 'the effective date of this amendment to this section'. The statute page does not say what that date is. A.R.S. 38-767(A)
ASRS tells new members they will not get a cost-of-living adjustment. The law keeps a separate increase for members who joined before an amendment date, but the law page does not give that date.
We explain how the increase works but do not say whether you qualify, and we do not project increases.
ASRS New Member Guide, pp. 6, 8; A.R.S. 38-767(A). What would settle it: The session law that amended 38-767, or a full ASRS member handbook (PBI section).How the amount is set
- Paid only from earnings above 8% a year, and capped at 4% overall. Below 1%, no increase. A.R.S. 38-767(B)-(C)
- Percentage rounded to the nearest tenth of a percent. A.R.S. 38-767(B)-(C)
- The amount for each person = (percentage x actuarial present value of retiree benefits) / (present value of a $1-per-year-of-service increase), times the member's years of credited service. A.R.S. 38-767(D)
- Unused excess earnings carry forward and earn 8% interest; that interest funds the additional increase below. A.R.S. 38-767(E)-(F)
The extra increase for long-retired members
An extra monthly increase for retirees with more than 10 years of service, by years since retirement: 5-9 years = 1 unit, 10-14 = 2, 15-19 = 3, 20-24 = 4, 25-29 = 5, 30+ = 6 units, the unit dollar amount being set from the interest credited under (F). A.R.S. 38-767(G)-(H)
| Years since retirement | Units |
|---|---|
| 5 to 9 | 1 |
| 10 to 14 | 2 |
| 15 to 19 | 3 |
| 20 to 24 | 4 |
| 25 to 29 | 5 |
| 30 or more | 6 |
For retirees with more than 10 years of service. The dollar value of a unit is set each year. A.R.S. 38-767(G)-(H)
Because the increase depends each year on investment returns and actuarial values, this site does not project PBIs.
From ASRS and the law
- ASRS tells members there is no cost-of-living adjustment. The law separately allows a permanent benefit increase each July 1 only when investment returns (on the actuarial value of assets) beat 8%, for retirees covered by that section.ASRS New Member Guide, pp. 6, 8; A.R.S. 38-767(A)-(C)
- The increase is figured as a dollar amount per year of your credited service, not as a percentage of your benefit.A.R.S. 38-767(D)
- You must have been receiving benefits by July 31 of the previous year to get a July 1 increase.A.R.S. 38-767(A)
- Check with ASRSThe permanent benefit increase covers members whose membership began before the effective date of an amendment to the section; the date is not shown on the statute page.A.R.S. 38-767(A)ASRS publications or the session law must say which members are covered.
Because there is no automatic raise, the health premium benefit and your choice of payment option matter more over a long retirement. Arizona's tax treatment is on the taxes page.
Questions
Does ASRS give a cost-of-living raise every year?
No. ASRS tells members there is no cost-of-living adjustment (ASRS New Member Guide, pp. 6, 8). The law separately allows a permanent benefit increase each July 1, for the retirees it covers, only when investment earnings on the actuarial value of assets beat 8%, capped at 4% (A.R.S. 38-767(B)-(C)).
Is the increase a percentage of my check?
No. It is figured as a dollar amount for each year of your credited service (A.R.S. 38-767(D)).
Can you tell me next year's increase?
No. It depends on each year's investment returns and actuarial values, so we don't project it.
Source: ASRS Employer Basics 2025 handbook, March 2025 edition, saved Nov. 12, 2026; with other ASRS publications and the Arizona Revised Statutes. Also ASRS New Member Guide, pp. 6, 8. Also A.R.S. 38-767 (Arizona Revised Statutes, Title 38, Ch. 5, Art. 2). Last reviewed .