Updated October 30, 2026. Quick answer: Arkansas LOPFI pays eligible retirees an annual 3% compound COLA on July 1, calculated on the previous July 1 benefit. The 2026 Member Handbook applies the same 3% to a COLA effective July 1, 2027, so 3% compound is the 2027 rate. It was also the rule for July 1, 2026. Only a change to the plan rules or the law would alter it.
The standing rule
The LOPFI Member Handbook says: “On July 1st of each year all eligible LOPFI retirees receive an annual 3% compound cost of living adjustment (COLA). The COLA is calculated by using the previous July 1st benefit amount.”
Who gets it and who waits
A new retiree waits: “A Member must have been retired for twelve (12) full months prior to July 1st to be eligible for their first COLA.” DROP participants and survivors have their own timing: “DROP participants will begin receiving a 3% compound cost of living adjustment (COLA) to their future monthly retirement benefit on July 1st once they reach year six (6) in DROP.” “Once a survivor receives benefits for a full twelve (12) months, they will be eligible for their first 3% compound cost of living adjustment (COLA). COLAs are awarded on July 1st of each year.” This page covers LOPFI only; the state police, teacher and state employee systems are separate.
The handbook’s own example
The handbook works through a 2027 case: “If a Member retired July 1, 2026, with a monthly benefit of $3,000, his/her COLA increase would be effective July 1, 2027, and would be increased by $90 ($3,000 x 3%) for a new monthly benefit of $3,090.”
Where 2027 stands
The July 1, 2027 increase is the standing 3% compound rule in the LOPFI 2026 Member Handbook, which describes no yearly board vote, so only a change to the plan rules or the law would alter it.
Two gaps to know about: the Arkansas statute text for the COLA was not among the sources read, and the handbook prints no separate dated board action for the July 1, 2026 COLA, since it states the 3% as a standing annual rule.
Common mistakes
- Expecting a COLA before twelve full months of retirement. The handbook requires twelve full months before July 1.
- Calculating the 3% on your original benefit. The handbook says it is calculated on the previous July 1 benefit amount, so it compounds.
- Expecting a COLA during the early years of DROP. DROP participants begin receiving it on July 1 once they reach year six.
Related: Arkansas LOPFI retirement decisions, how public pension decisions work, and whether Arkansas taxes pensions.
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Answer againSources
- Arkansas Local Police and Fire Retirement System, LOPFI Member Handbook 2026: www.lopfi-prb.com
- 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.