Escalation is the annual increase or decrease of a benefit, based on the cost-of-living index. Service retirement benefits can be eligible for either full or partial escalation. If a benefit is eligible for full escalation, it will increase or decrease each April at a rate equal to the increase or decrease in the cost-of-living index or 3 percent, whichever is less. However, a benefit will never decrease below the original amount paid.
The full escalation date for a service retirement is the first day of the month following the date you complete or would have completed 25 years of service credit. If you begin collecting your service retirement benefit prior to the full escalation date, your benefit may be eligible for partial escalation. For each month your retirement precedes the full escalation date, the rate of increase or decrease will be reduced by 1/36th. If you retire more than three years prior to the full escalation date, your benefit will not be eligible for escalation.
The full escalation date for a disability benefit is the first day of the month following the date you become eligible for that benefit. For death benefit payments, it is the first day of the month following the date your beneficiary becomes eligible for an accidental or ordinary death benefit paid as a continuing benefit.
Once you become eligible for a cost-of-living adjustment (COLA), your benefit will include either the COLA or escalation (if eligible), whichever adjustment provides the greater benefit.