The cost-of-living (COLA) rate for 2011 is 1.312%. MPERS provides an annual COLA to eligible retirees, survivors, beneficiaries, and work-related disability recipients. COLAs for members of the Year 2000 Plan are paid the month in which the member retired (e.g. January retiree receives a COLA in January, February retiree in February, etc.). However, if the member elected BackDROP, the COLA is granted on the anniversary of the BackDROP date.  COLAs for members of the Closed Plan are paid in October. 

Eligible Closed Plan benefit recipients, who have not reached their 65% COLA cap, will receive the guaranteed 4% COLA in October. The 65% COLA cap is reached approximately 12 years into retirement, including the BackDROP period.  

2011 COLA Rate	Description of Eligible Benefit Recipients
1.312%	·   Year 2000 Plan benefit recipients ·   Closed Plan benefit recipients who have already reached the 65% COLA Cap ·   Closed Plan benefit recipients hired on or after August 28, 1997
4.0%	·   Closed Plan benefit recipients who have not reached their 65% COLA Cap

The annual COLA rate is calculated each January based upon 80% of the percentage increase in the Consumer Price Index for All Urban Consumers for the United States (CPI-U) for the preceding calendar year. By law, the annual COLA rate cannot exceed 5%.

                  Calculating the 2011 COLA Rate 

Month	2010 CPI-U	2009 CPI-U
January	216.687	211.143
February	216.741	212.193
March	217.631	212.709
April	218.009	213.240
May	218.178	213.856
June	217.965	215.693
July	218.011	215.351
August	218.312	215.834
September	218.439	215.969
October	218.711	216.177
November	218.803	216.330
December	219.179	215.949
Average Monthly CPI-U	218.056	214.537

             Difference in 2010 and 2009:      218.056 - 214.537 = 3.519

                      Percentage Increase:      3.519 ÷ 214.537 = .01640 (1.640%)

     80% of Percentage Increase:      1.640% x .80 = 1.312%