What Do the Items On My ACERA Direct Deposit Statement or Check Stub Mean?
As of December 30, 2022, your ACERA benefit checks or direct deposit statements are issued by JPMorgan. Below you can find a sample direct deposit statement and check stub with explanations of what items on your statement mean.
Differences Between Your Working Pay Statement and Your ACERA Pay Statement
When you retire from work and begin receiving your ACERA monthly pension benefit payment (your lifetime monthly retirement allowance), you can expect your pay statement from ACERA to be different from your working pay statement.
Cost of Living Adjustments (COLA)
The Cost of Living Adjustments is an increase made to your retirement allowance every April 1. Each year, the change from December to December in the San Francisco Bay Area’s Consumer Price Index (CPI) is rounded to the nearest half percent and becomes the COLA amount. The amount is announced on this page in the first week of February each year.
Annual COLA Announcement
First week of February
Annual COLA Date
April 1
Maximum Annual COLA
| Tier 1 and Tier 3 | 3% |
| Tier 2 and Tier 4 | 2% |
2023–2024 CPI Change
2.5%
2025 COLA Increase
| Tier 1 and Tier 3 | Retired on or before April 1, 2023 | 3.0% |
| Tier 1 and Tier 3 | Retired April 2, 2023 to April 1, 2025 | 2.5% |
| Tier 2 and Tier 4 | Retired on or before April 1, 2025 | 2.0% |
COLA Reflected in Retirement Payment
April 30, 2025
COLA Maximums and the COLA Bank
The maximum statutory annual COLA increase is 3% for Tier 1 and 3 members and 2% for Tier 2 and 4 members. In years where the CPI increase is greater than these percentages, the difference between your maximum and the rounded CPI increase is automatically banked for future years. The banked percentage is used in years when the COLA is less than the maximum.
On April 1, 2025, Tier 1 and 3 members who retire on or before April 1, 2023 used 0.5% from their COLA Bank to achieve their maximum 3% COLA. Tier 1 and 3 members who retire April 2, 2023 to April 1, 2025 did not bank any percentage points. Tier 2 and 4 members banked 0.5%.
COLA banking happens automatically, and you don’t need to take any action.
COLA Banked Amounts 2025
| CPI Change | Banked % Applied | COLA Applied | 2025 Banked % | ||||
|---|---|---|---|---|---|---|---|
|
Tier 1 and Tier 3 Retired on or before April 1, 2023 |
2.5% | + | 0.5% | − | 3.0% | = | 0.0% |
|
Tier 1 and Tier 3 Retired April 2, 2023 − April 1, 2025 |
2.5% | + | 0.0% | − | 2.5% | = | 0.0% |
| Tier 2 and Tier 4 | 2.5% | + | 0.0% | − | 2.0% | = | 0.5% |
Tier 1 and 3 COLA Bank Balances 2025
| Retirement Date | COLA Bank Balance 4/1/2024 | 2025 Banked Withdrawal | COLA Bank Balance 4/1/2025 | ||
|---|---|---|---|---|---|
| On or Before 7/1/67 | 73.5% | - | 0.5% | = | 73.0% |
| 7/1/67 to 6/30/68 | 73.0% | - | 0.5% | = | 72.5% |
| 7/1/68 to 4/1/69 | 72.0% | - | 0.5% | = | 71.5% |
| 4/2/69 to 4/1/70 | 69.5% | - | 0.5% | = | 69.0% |
| 4/2/70 to 4/1/71 | 67.0% | - | 0.5% | = | 66.5% |
| 4/2/71 to 4/1/72 | 65.0% | - | 0.5% | = | 64.5% |
| 4/2/72 to 4/1/73 | 64.0% | - | 0.5% | = | 63.5% |
| 4/2/73 to 4/1/74 | 63.5% | - | 0.5% | = | 63.0% |
| 4/2/74 to 4/1/75 | 60.5% | - | 0.5% | = | 60.0% |
| 4/2/75 to 4/1/76 | 53.5% | - | 0.5% | = | 53.0% |
| 4/2/76 to 4/1/77 | 46.5% | - | 0.5% | = | 46.0% |
| 4/2/77 to 4/1/78 | 44.0% | - | 0.5% | = | 43.5% |
| 4/2/78 to 4/1/79 | 39.5% | - | 0.5% | = | 39.0% |
| 4/2/79 to 4/1/80 | 33.0% | - | 0.5% | = | 32.5% |
| 4/2/80 to 4/1/81 | 27.5% | - | 0.5% | = | 27.0% |
| 4/2/81 to 4/1/82 | 15.5% | - | 0.5% | = | 15.0% |
| 4/2/82 to 4/1/83 | 5.5% | - | 0.5% | = | 5.0% |
| 4/2/83 to 4/1/17 | 3.0% | - | 0.5% | = | 2.5% |
| 4/2/17 to 4/1/22 | 2.5% | - | 0.5% | = | 2.0% |
| 4/2/22 to 4/1/23 | 1.5% | - | 0.5% | = | 1.0% |
| 4/2/23 to 4/1/24 | 0.0% | - | 0.0% | = | 0.0% |
| 4/2/24 to 4/1/25 | 0.0% | - | 0.0% | = | 0.0% |
Tier 2 and 4 COLA Bank Balances 2025
| Retirement Date | COLA Bank Balance 4/1/2024 | 2025 Banked Amount | COLA Bank Balance 4/1/2025 | ||
|---|---|---|---|---|---|
| On or Before 4/1/85 | 43.0% | + | 0.5% | = | 43.5% |
| 4/2/85 to 4/1/86 | 39.5% | + | 0.5% | = | 40.0% |
| 4/2/86 to 4/1/87 | 37.5% | + | 0.5% | = | 38.0% |
| 4/2/87 to 4/1/88 | 36.5% | + | 0.5% | = | 37.0% |
| 4/2/88 to 4/1/89 | 35.0% | + | 0.5% | = | 35.5% |
| 4/2/89 to 4/1/90 | 32.5% | + | 0.5% | = | 33.0% |
| 4/2/90 to 4/1/91 | 30.5% | + | 0.5% | = | 31.0% |
| 4/2/91 to 4/1/92 | 26.5% | + | 0.5% | = | 27.0% |
| 4/2/92 to 4/1/93 | 25.0% | + | 0.5% | = | 25.5% |
| 4/2/93 to 4/1/97 | 24.5% | + | 0.5% | = | 25.0% |
| 4/2/97 to 4/1/98 | 24.0% | + | 0.5% | = | 24.5% |
| 4/2/98 to 4/1/99 | 22.0% | + | 0.5% | = | 22.5% |
| 4/2/99 to 4/1/00 | 21.0% | + | 0.5% | = | 21.5% |
| 4/2/00 to 4/1/01 | 19.0% | + | 0.5% | = | 19.5% |
| 4/2/01 to 4/1/07 | 15.5% | + | 0.5% | = | 16.0% |
| 4/2/07 to 4/1/12 | 14.0% | + | 0.5% | = | 14.5% |
| 4/2/12 to 4/1/14 | 13.0% | + | 0.5% | = | 13.5% |
| 4/2/14 to 4/1/15 | 12.5% | + | 0.5% | = | 13.0% |
| 4/2/15 to 4/1/16 | 12.0% | + | 0.5% | = | 12.5% |
| 4/2/16 to 4/1/17 | 11.0% | + | 0.5% | = | 11.5% |
| 4/2/17 to 4/1/18 | 9.5% | + | 0.5% | = | 10.0% |
| 4/2/18 to 4/1/19 | 8.5% | + | 0.5% | = | 9.0% |
| 4/2/19 to 4/1/20 | 6.0% | + | 0.5% | = | 6.5% |
| 4/2/20 to 4/1/22 | 5.5% | + | 0.5% | = | 6.0% |
| 4/2/22 to 4/1/23 | 3.5% | + | 0.5% | = | 4.0% |
| 4/2/23 to 4/1/24 | 0.5% | + | 0.5% | = | 1.0% |
| 4/2/24 to 4/1/25 | 0.0% | + | 0.5% | = | 0.5% |
More COLA Info
When Is the Annual COLA Announced?
The COLA amount that will be applied on April 1 is announced on this page in the first week of February each year.
New Retirees
If your first day of retirement is April 1 or before, you will get the COLA for that year. If your first day of retirement is April 2 or after, you’ll have to wait for next year’s COLA.
Long-Time Retirees and the Supplemental COLA
Many long-time retirees will be eligible for an additional non-vested Supplemental COLA.
What Is the Consumer Price Index (CPI)?
The CPI is a measure of price inflation. Specifically, it is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services such as food, housing, apparel, transportation, medical care, and education. The CPI is measured by the U.S. Bureau of Labor Statistics, which produces CPI figures for the U.S as a whole and for major urban areas such as the San Francisco Bay Area. ACERA bases its COLA on the change in CPI for the Bay Area from December to December.
Supplemental COLA
The Supplemental Cost of Living Adjustment (Supplemental COLA) maintains retirees’ purchasing power at no less than 85% of their original pension allowance. The Supplemental COLA is a non-vested (non-guaranteed) benefit which is evaluated and reauthorized annually by the Board of Retirement. It is funded by the Supplemental Retiree Benefits Reserve (SRBR). The Supplemental COLA is a separate benefit from the vested COLA.
Annual Supplemental COLA Date
April 1
Who Receives 2025 Supplemental COLA?
| Tier 1 | Retired on or before 04/01/1981 |
| Tier 2 | Retired on or before 04/01/2007 |
Note: This is contingent on the Board of Retirement approving the 2022 Supplemental COLA at its February 20, 2025 meeting.
Supplemental COLA Reflected Starting In Retirement Payment
April 30, 2025
Supplemental COLA FAQ
What Is Purchasing Power?
Purchasing power is the value of your dollars in terms of how much stuff they’ll buy. In the context of the Supplemental COLA, if it takes more than $1.15 today to purchase what $1.00 would purchase at the time of your retirement, you’ve lost at least 15% of your purchasing power. When this occurs, you may qualify for a Supplemental COLA to make up the difference and bring you back to 85% of your purchasing power.
How Do You Qualify For the Supplemental COLA?
As noted is the vested COLA posting, annual CPI increases that exceed the maximum legal percentage for your tier (2% or 3%) are banked for use in years that the CPI increase is below the maximum. So if the CPI is 4% and you can only get a 3% COLA, then 1% goes in your COLA bank. If you have a banked amount of more than 15%, you automatically qualify to receive Supplemental COLA.
How Much Supplemental COLA Will You Receive?
Your Supplemental COLA will be calculated individually each year based on your original retirement benefit, any accumulated COLA, and the percentage you have in the COLA bank. Your Supplemental COLA amount from the previous year has no connection with your new Supplemental COLA amount.
How Is This Year’s Supplemental COLA Different From Last Year’s?
- The cutoff date for Tier 1 members has shifted back by one year. As a result, Tier 1 members who retired between 04/02/1981, and 04/01/1982, will not receive a Supplemental COLA in 2025, even though they did in 2024. This change affects approximately 30 members. While these members are not receiving a Supplemental COLA this year, their retirement allowance has retained at least 85% of its original buying power, meaning their purchasing power has not eroded beyond the 15% threshold that triggers the Supplemental COLA.
- The cutoff date for Tier 2 members stayed the same, so Tier 2 members who retired on or before 04/01/2007 will continue to receive a Supplemental COLA.
- Note: These changes are contingent on the Board of Retirement approving the 2022 Supplemental COLA at its February 20, 2025 meeting.
Do You Need to Do Anything to Receive the Supplemental COLA?
No. As detailed above, calculations for who receives the Supplemental COLA are standardized, and if you qualify, you will receive the Supplemental COLA automatically in your monthly ACERA retirement benefit.
Tax Considerations For Your Retirement Allowance
Since you made your contributions to the retirement fund on a tax-deferred basis, your ACERA pension allowance is subject to federal and state income tax (where applicable). If you made any part of your contributions using post-tax dollars (usually with a service credit purchase), a proportionate amount of your pension allowance is non-taxable.
Income Tax Withholding
As a part of the retirement application process, you specified how much federal and California state income tax to withhold from your retirement allowance check (California is the only state income tax we can withhold). You can update your withholding at any time using the processes below. Withholding changes made by the 10th of the month will be effective on your next monthly retirement allowance. Be sure to read the withholding form’s instructions carefully, and consult your tax advisor if you have questions.
How to Update Your Federal Income Tax Withholding
Complete the W-4P forms below using DocuSign or the PDF. Avoid paper, ink, scanning, and hassle with the DocuSign form.
How to have more taxes taken out of your check
If you want more taxes taken out of your checks, perhaps leading to a tax refund when you file your annual return, here’s how you might adjust your W-4P.
- Reduce the number of dependents.
- Add an extra amount to withhold on line 4(c).
How to have less tax taken out of your check
If you want less in taxes taken out of your checks, perhaps leading to having to pay a tax bill when you file your annual return, here’s how you might adjust your W-4P.
- Increase the number of dependents.
- Reduce the number on line 4(a) or 4(c).
- Increase the number on line 4(b).
Withholding Flat Amounts
Due to IRS rules, ACERA does not allow you to withhold a specific flat amount of your choosing.
A workaround for this is to do the following:
- Follow one of the methods above for How to Have Less Tax Taken Out of Your Check.
- After you get your next pension payment from ACERA, complete another W-4P form and add an additional amount on line 4c Extra Withholding to get you up to the specific withholding amount you’re looking for.
Be careful, because you may end up owing taxes (and possibly penalties) if ACERA doesn’t withhold enough. You can submit multiple withholding forms to ACERA until your withholding is adjusted to your needs.
How to Update Your California Income Tax Withholding
The only state income tax ACERA can withhold is California’s. If you live in another state that collects state income tax, you are responsible for filing and paying your taxes with your state of residence.
- Complete the DE-4P form below using DocuSign or the PDF. Avoid paper, ink, scanning, and hassle with the DocuSign form. The form contains a worksheet starting on page 3 that will help you calculate your withholding.
ACERA Reports Your Retirement Income on Form 1099-R
Each year, federal law requires ACERA to report income to its payees with Form 1099-R, regardless of their taxable status. This includes payees on duty disability for whom there may be no tax liability whatsoever. Your 1099-R becomes available in your online account in mid to late January. We also mail the 1099-R to payees on or before January 31.
Payees may also receive multiple 1099-R forms for payments resulting from a member’s death or if benefit adjustments are paid during the same tax year.
If You Need a Duplicate 1099-R
Log in to your online account to access all of your past 1099-Rs. Or you may contact us to request us to mail a copy to your current address. ACERA cannot fax or e-mail this form to you.
ACERA Cannot Discuss Specific Personal Information With You Over the Phone
You need to submit inquiries to ACERA Member Services in writing.
Taxation if You Live Outside the United States
If you are considering moving out of the United States and want to avoid the possibility of 30% taxation on your pension, you must make sure you have the following documents on file with ACERA.
- U.S. Certified Birth Certificate; verifying you were born in the United States, or submit a W-9 Form
- If you are a Non-Resident Alien, a copy of your green card
A person who is not a U.S. Citizen or resident alien but will be residing at a non-U.S. address is subject to a mandatory federal tax withholding on a U.S. income source at the rate of 30%. The IRS requires these individuals to complete a W-8BEN Form and it must be submitted to ACERA. For non-citizens and non-resident aliens, a reduced tax rate including a total tax exemption may apply if there is a tax treaty between the non-U.S. resident’s country and the United States.