How it works
After you have been retired at least one full fiscal year, your benefit is reviewed for a COLA each July 1, using the CPI-W for the previous fiscal year. Tier One: the CPI-W, capped at 2.5%; if inflation has eroded the benefit below 75% of its original purchasing power, that year's COLA is the full CPI-W (no cap). Tiers Two, Three and Four: the CPI-W, capped at 1.0%, with no purchasing-power COLA. School Handbook p. 45, Cost-of-Living Adjustment (COLA)
Not sure of your tier? It's set by the date you joined: see which tier am I?
| Tier | Cap | Purchasing-power floor |
|---|---|---|
| Tier One | 2.5% | Yes: full CPI-W below 75% |
| Tier Two | 1% | No |
| Tier Three | 1% | No |
| Tier Four | 1% | No |
School Handbook p. 45, Cost-of-Living Adjustment (COLA); Neb. Rev. Stat. §79-947.06 (members before July 1, 2013), §79-947.07 (members on or after July 1, 2013)
Ten years of COLAs: Tier One vs. the rest
Our example: $2,500 a month from July 1, 2026, if the CPI-W rose 2.56% every year (as it did to June 2025).
| July 1 | Tier One | Tiers Two to Four |
|---|---|---|
| 2027 | $2,562.50 | $2,525.00 |
| 2028 | $2,626.56 | $2,550.25 |
| 2029 | $2,692.22 | $2,575.75 |
| 2030 | $2,759.53 | $2,601.51 |
| 2031 | $2,828.52 | $2,627.53 |
| 2032 | $2,899.23 | $2,653.81 |
| 2033 | $2,971.71 | $2,680.35 |
| 2034 | $3,046.00 | $2,707.15 |
| 2035 | $3,122.15 | $2,734.22 |
| 2036 | $3,200.20 | $2,761.56 |
A capped COLA falls behind when inflation runs above the cap. Tier One's floor applies only once a check has lost a quarter of its buying power; in this example it never does. School Handbook p. 45, Cost-of-Living Adjustment (COLA)
Your first COLA
Retire July 1, 2026: first COLA July 1, 2027. Retire August 1, 2026: first COLA July 1, 2028. That's our reading of "at least one full fiscal year". Picking a date? See how the Rule of 85 and early retirement set your start, and estimate your starting check.
The handbook says the COLA starts after you've been retired 'at least one full fiscal year'. It doesn't show which July 1 that is for someone who retires partway through a fiscal year, and the statute says nothing about a wait.
What we do: Retire July 1, 2026: first COLA July 1, 2027. Retire any later month of that fiscal year: first COLA July 1, 2028.
What would settle it: NPERS confirmation, or a retiree's first COLA letter.A catch-up COLA in state law
Tier One retirees (and disability or death beneficiaries) receiving benefits at least five years with at least 25 years of service whose benefit per year of service is at or below a minimum accrual rate ($25.49 in 2012, indexed to CPI-W since) can get a catch-up COLA of the cumulative CPI-W (up to 3% a year compounded) since their last adjustment; each retiree gets the one method that gives the largest increase. Neb. Rev. Stat. §79-947.06(1), (4)
From the sources
- After you have been retired a full fiscal year, your benefit is reviewed each July 1 for a cost-of-living increase based on the CPI-W. Tier One: up to 2.5%. Tiers Two, Three and Four: up to 1.0%.School Handbook p. 45, Cost-of-Living Adjustment
- Tier One also has a floor: if inflation pushes your benefit below 75% of its original buying power, that year's increase is the full CPI-W with no 2.5% cap. Tiers Two to Four have no floor.School Handbook p. 45
- On July 1, 2025 the CPI-W rise was 2.56%, so capped Tier One retirees got 2.5% and Tier Two to Four retirees got 1.0%.Retiree Update Jan. 2026 p. 1
- Check with NPERSThe handbook says your first increase comes after a full fiscal year of retirement. We read that as July 1, 2027 for a July 1, 2026 start, and July 1, 2028 for any later start in that fiscal year. Check with NPERS.School Handbook p. 45
Questions
How big is the COLA?
The rise in the CPI-W over the past fiscal year, capped at 2.5% in Tier One and 1% in Tiers Two, Three and Four.
When is the first COLA?
On a July 1 after you've been retired a full fiscal year (July 1 to June 30).
What was the latest COLA?
On July 1, 2025 the CPI-W rose 2.56%, so Tier One got 2.5% and Tiers Two to Four got 1%.
Source: Nebraska School Employees Retirement System Handbook, Revised 07/2026, p. 45. Also: Retiree Update Jan. 2026 p. 1; Neb. Rev. Stat. §§ 79-947.06, 79-947.07. Last reviewed .