Pennsylvania State Retirees Get Their First Pension COLA in 24 Years

Retirees under the Pennsylvania State Employees’ Retirement System (SERS) are getting a cost-of-living adjustment (COLA) for the first time since 2002. Governor Josh Shapiro signed Pennsylvania’s Fiscal Year 2026-27 budget on July 12, 2026, and buried inside it was a raise more than two decades in the making for retirees who left state service on or before July 1, 2001.

A budget deal delivers a decades-overdue raise

According to the SERS fact sheet on the adjustment, eligible retirees — those who retired on or before July 1, 2001 after reaching their full retirement age or date (age 60 or 50, depending on class of service), or who qualified through disability retirement — will see increases ranging from 15% to 24.5%, with the size of the bump tied to how long ago they retired. The longer someone has been drawing a pension, the bigger the percentage increase, since inflation has had more time to erode the original benefit.

NoteThese are the two reference points published in the SERS fact sheet; the full sliding scale between them covers every eligible retirement year and is available directly from SERS.

The adjustment is retroactive to July 1, 2026, with the higher monthly amount — plus back pay covering July and August — landing in retirees’ September 30, 2026 benefit payment. SERS confirms this is the system’s first COLA since 2002, meaning some retirees have gone 24 years without any adjustment to a pension that was fixed the day they left work.

A years-long push from AFSCME and retiree advocates

AFSCME Council 13, which represents thousands of current and retired Pennsylvania state employees, championed the change alongside retiree advocacy groups. Jeanne Weaver, president of the Retired Public Employees of Pennsylvania Chapter 13, called it “an important and long-overdue step forward” that “won’t erase more than two decades without an increase.” That last part is worth sitting with: even a real, meaningful raise doesn’t undo the years a fixed income spent losing ground to rising costs.

What a 24-year gap teaches every pensioner

A well-funded public pension is genuine, durable retirement income — but this story is a real-world example of a risk every pensioner carries: a benefit that looked solid on the day of retirement can quietly lose purchasing power for decades before anyone with the authority to fix it actually does. SERS retirees didn’t get a COLA because their pension ran into trouble; they went without one because it required an act of the legislature, and that took 24 years to happen.

For union and public-sector retirees, that’s a strong argument for pairing pension income with coverage that isn’t subject to a state budget cycle. A whole life or final expense policy a retiree owns individually locks in a benefit amount and a premium that don’t depend on the next legislative session, a funding formula, or anyone else’s vote. Funeral and final expenses land on a family’s timeline, not Harrisburg’s.

A pension is retirement income, not a death benefit

It’s also worth being clear about what a SERS pension does and doesn’t do. It’s a monthly income stream for the retiree, and for many members a portion can continue to a surviving spouse depending on the payment option chosen at retirement — but most public pensions were never built to hand a family a lump sum for a funeral, outstanding medical bills, or final expenses. Those costs, which the National Funeral Directors Association and others regularly put in the $8,000 to $13,000 range for a typical service, generally fall on whatever the family has set aside separately, not on the pension itself. That gap is exactly what a final expense or small whole life policy is designed to close.

None of this is a criticism of the SERS fix, which is a real and welcome correction for tens of thousands of retirees. It’s simply a reminder that a pension COLA and a life insurance policy are solving two different problems — income while you’re alive, versus a fixed benefit the moment you’re not — and a retirement plan that leans on only one of them has a gap. Our free calculator can help estimate how much coverage a household might need, and who we serve covers the retirees and union households we work with most.

Source

• Pennsylvania State Employees’ Retirement System: 2026 Cost-of-Living Adjustment Fact Sheet

Frequently Asked Questions

Who qualifies for the 2026 SERS COLA?

Retirees who retired from Pennsylvania state service on or before July 1, 2001, after reaching their full retirement age or date (age 60 or 50, depending on class of service), or who qualified through disability retirement.

How large is the increase?

Between 15% and 24.5%, depending on retirement date — the longer someone has been retired, the larger the percentage increase, per the SERS fact sheet.

When will retirees actually see the money?

The adjustment, plus retroactive back pay for July and August 2026, is included in the September 30, 2026 benefit payment. The increase itself is retroactive to July 1, 2026.