Retirement Security:

Pension COLAs

HEHS-95-219R: Published: Aug 11, 1995. Publicly Released: Aug 23, 1995.

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO provided information on the frequency and characteristics of cost-of-living adjustments (COLA) that retirees receive from public and private pension plans. GAO noted that: (1) Social Security and federal pension plans incorporate automatic, annual COLA; (2) over half the states reporting to the Bureau of Labor Statistics provide automatic COLA annually, generally capped between 3 and 5 percent; (3) the remaining states mainly provide ad hoc COLA, although the number of states granting ad hoc COLA has gradually decreased since 1987, due to lower inflation; (4) ad hoc COLA in private pension plans occur less frequently than automatic COLA in the public sector and the plans often specify a maximum increase; (5) a number of factors, such as union negotiations, affect employers' decisions to provide COLA increases; (6) COLA provisions vary widely among industries, ranging from 3 percent of pension plans in the retail sector to over 60 percent in the transportation industry; and (7) ad hoc adjustments to private sector pension benefits have declined in recent years from over 50 percent to under 10 percent of plans.

Sep 16, 2014

Jul 29, 2014

Jul 28, 2014

Jul 7, 2014

Jun 16, 2014

May 27, 2014

Apr 21, 2014

Mar 5, 2014

Feb 26, 2014

Looking for more? Browse all our products here