Updated October 30, 2026. Quick answer: The San Diego County Employees Retirement Association (SDCERA) pays a COLA based on San Diego area CPI, capped at 3% a year for Tiers I, II and A and 2% for Tiers B, C and D, with any excess CPI banked for later years. The Board of Retirement approved the maximum for 2026: 3% for Tiers I, II and A and 2% for Tiers B, C and D, effective April 1 and first paid on April 30, 2026. No 2027 COLA has been approved yet.
How the SDCERA COLA works
SDCERA’s annual report describes the rule: “A cost-of-living adjustment (COLA) is paid to retired Members based on changes in the Consumer Price Index for the San Diego-Carlsbad Area.” The Board’s approval timing is explained in the member FAQ: “The Board of Retirement approves the COLA each February. It takes effect April 1, and you’ll see it in your pension payment on April 30.” On who qualifies: “To receive that year’s COLA, you must be retired before April 1 (a retirement date of March 31 or earlier qualifies).”
The cap and the COLA bank
The report states the cap for the older tiers: “The COLA for retired Tier I, Tier II, and Tier A Members is limited to a maximum of 3% per year.” The COLA bank page adds: “Anytime the CPI is above the maximum COLA you can receive, the extra percentage is placed in your COLA bank.” It also says: “A negative CPI will reduce your COLA bank, but a negative CPI will not reduce your SDCERA pension payment.”
The 2026 COLA
SDCERA’s announcement of the 2026 COLA says: “Tier I, II and A members will receive the maximum COLA of 3% and 0.79% goes in the COLA bank.” And: “Tier B, C and D members will receive the maximum COLA of 2% and 1.79% goes in the COLA bank.” On timing: “The COLA will go into effect on April 1, and retirees will see it in their pension payments starting April 30, 2026.”
What the documents do not say
The CPI percentage behind the 2026 award is not printed in the pages read, only that the maximum was granted and what remains in each bank. The Government Code section that creates the rule is not cited in them either, and no earlier year’s COLA percentage was archived.
Where 2027 stands
No 2027 SDCERA COLA is set: the Board of Retirement approves each year’s COLA in February, and the sources read show no 2027 approval.
Common mistakes
- Expecting a COLA in the year of retirement. A member must be retired before April 1 to receive that year’s COLA.
- Treating a negative CPI as a pension cut. The COLA bank absorbs it and the pension payment itself does not fall.
- Applying the 3% cap to every tier. Tiers B, C and D are capped at 2%.
Related: SDCERA retirement decisions, how public pension decisions work, and whether California taxes pensions.
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Answer againSources
- SDCERA, 2024 Annual Comprehensive Financial Report (Cost-of-Living Adjustments plan summary): content.sdcera.org
- SDCERA, Frequently Asked Questions (COLA section): content.sdcera.org
- SDCERA, Cost of Living Adjustments (COLA) page with COLA bank balances (body text from embedded page JSON): content.sdcera.org
- SDCERA, Maximum 2026 COLA Approved for SDCERA Retirees (body text from embedded page JSON): www.sdcera.org
- 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.