Updated October 30, 2026. Quick answer: The Vermont State Treasurer’s notice sets the COLA effective January 1, 2027 for the State Employees’ and State Teachers’ systems. The Northeast Region CPI-U change for the year ending June 30, 2026 is 4.30%. State Groups A and B and Teachers Group A get 4.30%, State Group C members who did not meet the notice’s June 30, 2022 criteria get 4.00%, and Teachers Groups B and C get 2.15%. The COLA is never negative.
The January 1, 2027 notice
The Treasurer’s notice states: “The change in the Northeast Region CPI-U for the year ending June 30, 2026, is 4.30%. Therefore, the COLAs effective January 1, 2027, for eligible retirees and beneficiaries will be as follows by System and Group.”
The rule in the statutes
For the State system, 3 V.S.A. 470 reads: “In no event shall a beneficiary receive a negative adjustment to the beneficiary’s retirement allowance.” It gives one-half for some retirees: “one-half of the net percentage increase calculated in subsection (b) of this section for Group F members who retired on or before June 30, 2008”.
Waiting period
The same section sets a 24-month waiting period for members first eligible for normal or unreduced early retirement on or after July 1, 2022, and for Group D members first appointed or elected on or after that date; other members have a shorter wait. The statute reads: “the member must be in receipt of a retirement allowance for at least 24 months prior to the January 1 effective date of any postretirement adjustment.”
The teachers’ rule
For teachers, 16 V.S.A. 1949 gives Group C one-half: “one-half of the net percentage increase calculated pursuant to subsection (b) of this section for all Group C members, provided that:” For Group C members first eligible for normal retirement who leave active service on or after July 1, 2022, it limits the adjustment: “the maximum amount of any adjustment under this section shall be four percent and the minimum amount shall be zero percent.” Earlier Group C members and Group A have a five percent maximum under the same section.
The last COLA already paid
The notice for January 1, 2026 states: “The change in the Northeast Region CPI-U for the year ending June 30, 2025, is 3.00%.”
What the documents do not say
The 2027 notice carries no printed issue date, and the notice lists more groups than this page reproduces; read the full notice for Groups D, E, F and G. The plan description pages only link to the notice, so the rule text above is from the statutes.
Where 2027 stands
The 2027 COLA is set: the Treasurer’s notice lists the January 1, 2027 figures by group, and this page updates only if the Treasurer corrects the notice.
Common mistakes
- Applying 4.30% to every group. The notice gives Teachers Groups B and C 2.15%, and some State groups 4.00%.
- Expecting the January 2027 COLA before the waiting period ends. Members first eligible on or after July 1, 2022 must be in receipt of an allowance for 24 months.
- Treating the CPI-U change as the COLA for everyone. It is the input, and the statute scales it by group.
Related: Vermont VSERS and VSTRS retirement decisions, how public pension decisions work, and whether Vermont taxes pensions.
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Answer againSources
- Vermont Office of the State Treasurer, COLA Notice effective January 1, 2027: www.vermonttreasurer.gov
- Vermont General Assembly, 3 V.S.A. 470 Postretirement adjustments to retirement allowances: legislature.vermont.gov
- Vermont General Assembly, 16 V.S.A. 1949 Postretirement adjustments to retirement allowances: legislature.vermont.gov
- Vermont Office of the State Treasurer, COLA Notice effective January 1, 2026: www.vermonttreasurer.gov
- Related official page (not quoted): IRS Tax Topic 410, Pensions and annuities: www.irs.gov
- Related official page (not quoted): IRS Tax Topic 411, Pensions: the General Rule and the Simplified Method: www.irs.gov
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.