How it is figured
- Group C (and B): half of the Northeast Region CPI-U increase for the year to June 30, at most 5% and at least 1%. 16 V.S.A. § 1949(c)(1), (d)(2)(A) (one-half of the net increase; maximum adjustment 5%; an adjustment of less than 1% is assigned 1%); 2025 valuation, p. 61, Exhibit H (all other Group C: half of net CPI, CPI capped at 10%)
- Group C, first eligible and leaving on or after July 1, 2022: half the increase, at most 4%, no minimum, and a 24-month wait. 16 V.S.A. § 1949(c)(2), (d)(2)(B) (one-half of the net increase; maximum 4%, minimum 0%; 24 months in pay); 2025 valuation, p. 61, Exhibit H (CPI capped at 8%); Act 114 (2022) as enacted, pp. 70-72, Sec. 23
- Group A: the full increase if it is at least 1%, at most 5%. 16 V.S.A. § 1949(c)(1), (d)(1); 2025 valuation, p. 61, Exhibit H (Group A)
- Retired early? Yours starts the January after you reach 62 (Group C #1) or 65 (Group C #2). Group C #1 handout, p. 6, COLA (the January after attaining the age of 62); Group C #2 handout, p. 6, COLA (the January after attaining the age of 65); 16 V.S.A. § 1949(c)(3); 2025 valuation, p. 61, Exhibit H
COLA: the 2012 handouts give one Group C rule (12 checks, 5% ceiling, 1% minimum). Act 114 of 2022 added a 24-month wait and a 4% maximum with no minimum for members first eligible and leaving on or after July 1, 2022. The later law controls for that cohort; the handouts still match the statute for everyone else.
Group C #2 handout, p. 6; 16 V.S.A. § 1949(c)(2), (d)(2)(B); Act 114 (2022) as enacted, pp. 70-72, Sec. 23Since Act 114 of 2022, Group C members first eligible to retire, who leave on or after July 1, 2022, wait 24 months for a COLA and have a 4% maximum.
We estimate whether you were eligible by June 30, 2022 by counting your service back from your retirement date.
16 V.S.A. § 1949(c)(1)-(2)Inflation figures from the sources, under today's rules
| Inflation | Group A | Group C (eligible by June 30, 2022) | Group C (after) |
|---|---|---|---|
| 2.2% | 2.2% | 1.1% | 1.1% |
| 3% | 3% | 1.5% | 1.5% |
| 4.3% | 4.3% | 2.15% | 2.15% |
| 7.6% | 5% | 3.8% | 3.8% |
Computed with today's rules (after Act 87 of 2024). In 2023, before Act 87, the 7.6% figure gave Group C only 2.5%; a one-time payment made up the difference. Joint Fiscal Office memo, FY2024 BAA VSTRS COLA Modification (Jan. 10, 2024), p. 2
Recent increases
- Jan. 1, 2027: Group A 4.3%, Groups B and C 2.15%. 2027 COLA notice, p. 1 (CPI change 4.30%) and p. 2 (Teachers' System: Group A 4.30%, Groups B and C 2.15%)
- Jan. 1, 2026 COLA: Group A 3.00%. 2025 valuation, p. 26, note 1 (actual 2026 COLAs: 3.00% Group A, 1.50% Groups B and C)
- Jan. 1, 2026 COLA: Groups B and C 1.50%. 2025 valuation, p. 26, note 1; p. 49 (January 1, 2026, COLA expected to be 1.50%)
- Calendar 2021: Group A 0%, Groups B and C 1%. Winter 2021 newsletter, p. 1 (Cost-of-Living Adjustment for Calendar Year 2021); 16 V.S.A. § 1949(d)(1)(A), (d)(2)(A)
Could it get better?
Act 114 created the Postretirement Adjustment Allowance Account, which may fund COLA formula improvements (the stated goal is moving toward 100% of CPI) for members active on or before June 30, 2022 who contributed through fiscal year 2023, or who joined later and contributed at least one year. Money can be used only if the Board recommends it, the System is at least 80% funded, the Account can pay the full present value, and the General Assembly approves. The Board must evaluate this by Sept. 1, 2027 and every three years after, reporting by Jan. 15, 2028. The valuation includes no liability for it. 16 V.S.A. §§ 1949a, 1949b; Act 114 (2022) as enacted, Secs. 21-22; 2025 valuation, p. 49 and p. 62, Exhibit H
What the sources say
- On Jan. 1, 2027, VSTRS retirees who qualify get a 4.30% increase in Group A and 2.15% in Groups B and C. Inflation (Northeast CPI-U) was 4.30% for the year to June 30, 2026.2027 COLA notice, pp. 1-2
- Each January, Group C retirees get half of the inflation increase for the year to the previous June 30, with a 5% maximum and a 1% minimum. Group A retirees get the full increase if it is at least 1%. A drop in prices means no adjustment, never a cut.Group C #2 handout, p. 6; 16 V.S.A. § 1949(a)-(e)
- You need to have retired on a normal or disability retirement and been retired at least a calendar year (twelve checks) before your first COLA.Group C #2 handout, p. 6; 16 V.S.A. § 1949(c)(1)
- Act 114 of 2022 changed this for some members: if you first become eligible for normal retirement and leave on or after July 1, 2022, you wait 24 months, and your COLA is capped at 4% with no 1% minimum.16 V.S.A. § 1949(c)(2), (d)(2)(B); Act 114 (2022) as enacted, pp. 70-72, Sec. 23
- Earlier years: Jan. 1, 2021, Group A 0.0% and Groups B and C 1.00%; Jan. 1, 2026, Group A 3.00% and Groups B and C 1.50%.Winter 2021 newsletter, p. 1; 2025 valuation, p. 26, note 1
- From 2016 until Act 87 of 2024, the 5% cap applied to inflation, not to the adjustment, so the most a Group C retiree could get was 2.5%. Act 87 changed that back.Joint Fiscal Office memo, FY2024 BAA VSTRS COLA Modification (Jan. 10, 2024), pp. 1-2; Act 87 (2024) as enacted, pp. 70-74, Sec. 85
When your first COLA arrives depends on your group and on whether you retired early. The amount it raises comes from the benefit formula and the payment option you chose.
Questions
What is the VSTRS COLA for 2027?
2.15% for Groups B and C and 4.3% for Group A, effective Jan. 1, 2027. Inflation was 4.3% for the year to June 30, 2026.
When do I get my first COLA?
If you retire on a normal or disability retirement, after you have been retired at least a year (12 months; 24 months if you first became eligible and left on or after July 1, 2022). If you retire early, the January after you reach 62 (Group C #1) or 65 (Group C #2).
Can the COLA be negative?
No. If prices fall, there is no adjustment that year, and the drop is offset against later increases.
Source: VSTRS Eligibility for Retirement: Group C #2 handout (Office of the State Treasurer), undated (PDF of Sept. 21, 2012), with 16 V.S.A. chapter 55 as of the 2026 session, p. 6; 2027 COLA notice pp. 1, 2; 2025 valuation pp. 26, 61; Act 114 (2022) pp. 70, 71, 72; Group C #1 handout p. 6; Winter 2021 newsletter p. 1; Joint Fiscal Office memo pp. 1, 2; Act 87 (2024) pp. 70, 71, 72, 73, 74; 16 V.S.A. § 1949. Last reviewed .