Updated October 30, 2026. Quick answer: New Jersey PERS has no COLA to pay. The Division of Pensions says cost-of-living adjustments were suspended for retirees of all retirement systems under Chapter 78 of 2011, effective June 28, 2011, with no reduction to COLA increases already added before then. A Pension Committee may consider reinstating the COLA only once the system, or the relevant State or local part of it, reaches a target funded ratio of 75%, rising to 80%. No 2027 COLA is set.
More on public pension retirement ages and eligibility: the New Jersey PERS retirement age and eligibility rules by tier.
What the Division of Pensions says
The PERS member guidebook says COLAs for retirees of all retirement systems are suspended: “Please note, however, that there is no reduction to any COLA increases that were already added to retiree benefits prior to June 28, 2011, the effective date of the law.”
The Division’s pension reform page adds: “Cost-of-Living Adjustments (COLA) were suspended for all retirees of all retirement systems. No further COLA increases will be granted; however, the provision does not reduce any benefit for COLA increases that were already made to retiree benefits prior to the effective date of the law.”
When a COLA could return
The Division’s pension reform page says of the Pension Committees: “At that time, the Pension Committees are to give the reactivation of the COLA priority consideration.” The target funded ratio in the law, applied to the State part and the local part of each system, is: “75 percent in State fiscal year 2012, and increased in each fiscal year thereafter by equal increments for seven years, until the ratio reaches 80 percent at which it shall remain for all subsequent fiscal years.”
What the documents do not say
The documents read do not state the last COLA granted before the suspension, and they do not say whether the PERS funded ratio has reached the target or whether a Pension Committee has acted. This page does not guess at either.
Where 2027 stands
No 2027 PERS COLA is set: the 2011 suspension stands in the documents read, and this page updates if a Pension Committee reinstates the COLA.
Common mistakes
- Expecting a yearly COLA like some other state systems pay. The guidebook says COLAs are suspended for retirees of all retirement systems.
- Assuming the suspension cut the COLA increases a retiree already had. The guidebook says there was no reduction to increases added before June 28, 2011.
- Counting on reinstatement. It is discretionary and depends on the funded ratio and a Pension Committee.
Related: New Jersey PERS retirement decisions, how public pension decisions work, and whether New Jersey taxes pensions.
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Answer againSources
- NJ Division of Pensions & Benefits, PERS Member Guidebook (SP-0333-1225): www.nj.gov
- NJ Division of Pensions & Benefits, Pension and Health Benefit Reform (Chapter 78, P.L. 2011) page: www.nj.gov
- NJ Legislature, P.L. 2011, c. 78 (statute text): pub.njleg.state.nj.us
Read from the primary documents linked above on October 30, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the IRS itself is the right place to confirm anything consequential.