Updated October 30, 2026. Quick answer: Metro Nashville’s pension plan raises Division A benefits each January 1 by the CPI rise for the 12 months ending the prior September 30 (up to 5%), and Division B benefits by 80% of the amount that rise exceeds 1%. For January 1, 2026 the Metropolitan Employee Benefit Board approved 3.00% for Division A and 1.50% for Division B, from a 3.013% CPI increase. The January 2027 figure is not set: it depends on the CPI change for the 12 months ending the prior September 30.
The formula
The 2025 actuarial valuation describes the Division A rule: “are increased each January 1 by the percentage (up to 5%) which the Consumer Price Index has increased during the 12 months ending on the September 30 prior to the calendar year for which the escalation applies.” For Division B: “are increased each January 1 by 80% of the percentage (up to 5%) by which the increase in the Consumer Price Index during the 12 months ending on the September 30 prior to the calendar year for which the escalation applies exceeds 1%.” “The percentage is applied to the original benefit. Escalated benefits never decrease.”
The 2026 approval
The Benefit Board minutes of December 2, 2025 say: “as a result of the 3.013% increase in the Consumer Price Index, an increase of 3.00% under Division A (the percentage rounded to the nearest one-half percent and capped at 5.00% pursuant to Metro Code Section 3.08.171) should be granted”. The motion: “B.R. Hall moved for approval of the cost-of-living adjustments for eligible retirees under Division A of 3.00% and 1.50% for eligible retirees under Division B beginning in January 1, 2026.” Check, computed here from the Division B formula: 80% of (3.013% minus 1%) is 1.610%; which rounds to 1.50% at the nearest half percent, the rounding the November 2024 minutes apply to Division B.
Timing
The Human Resources guide says: “Cost of Living Adjustments under the Metro pension plan are effective at the first of the year and are paid on the January pension check issued at the end of the month.”
The closed plans
A separate July 1 increase applies to the closed former city and county plans. The July 7, 2026 minutes say: “a cost of living adjustment increase of 3.50% should be granted to retirees eligible to receive a cost of living increase under the closed plans beginning July 1, 2026.”
Recent years
The Board’s minutes show 3.00% and 1.50% for 2026, 2.50% and 1.00% for 2025, and 3.50% and 2.00% for 2024, for Divisions A and B in each year.
What the documents do not say
The conditions for being an eligible retiree are not stated in the sources read. The valuation summary says Division B rises by up to 5%, while the minutes describe it as capped at 4.00%; the Metro Code text was not archived, so the exact Division B cap is unresolved.
Where 2027 stands
No January 1, 2027 Metro Nashville increase is set: it depends on the CPI change for the 12 months ending the prior September 30, and the Benefit Board has not yet approved a figure.
Common mistakes
- Applying the Division A percentage to Division B. Division B uses 80% of the CPI rise above 1%.
- Mixing the January increase with the July 1 increase for the closed plans. They are separate rules.
- Expecting the percentage to apply to your current benefit. The valuation says it is applied to the original benefit, and escalated benefits never decrease.
Related: Metro Nashville employee benefit board retirement decisions, how public pension decisions work, and whether Tennessee taxes pensions.
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Answer againSources
- Metro Government of Nashville and Davidson County, Metropolitan Government of Nashville and Davidson County Tennessee Pension Plan, actuarial valuation as of June 30, 2025: www.nashville.gov
- Metropolitan Employee Benefit Board, Minutes, Metropolitan Employee Benefit Board, December 2, 2025: www.nashville.gov
- Metro Human Resources, Human Resources Retirement Guide B, January 1, 2023: www.nashville.gov
- Metropolitan Employee Benefit Board, Minutes, Metropolitan Employee Benefit Board, July 7, 2026: www.nashville.gov
- Metropolitan Employee Benefit Board, Minutes, Metropolitan Employee Benefit Board, November 5, 2024: www.nashville.gov
- Metropolitan Employee Benefit Board, Minutes, Metropolitan Employee Benefit Board, November 7, 2023: www.nashville.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.