A cost-of-living adjustment (COLA) is an annual adjustment applied to your retirement income to reflect changes in the economy (inflation). Most DRS retirement plans offer a COLA, but Plan 1 members in PERS and TRS only have a COLA if they selected it during retirement. View the 2026 COLA percentages by retirement date and plan. When will I receive the 2026 COLA? LEOFF Plan 1 COLAs take effect April 1 and start with April 30 benefit payments. All other DRS Plan COLAs take effect July 1 and start with July 31 benefit payments. You need to be retired by July 1 for at least one year to be eligible for a COLA. Once you’re eligible, you’ll receive any COLA starting with the pension payment issued at the end of July, and every year after. You don’t need to apply to receive the COLA, it’s automatic. How much will the COLA be? The maximum annual COLA you can receive for most DRS plans is 3%. If inflation that year is above 3%, the additional amount is applied to future adjustments (called COLA banking). Any year inflation is lower than 3%, the COLA can pull from banked amounts in prior years. This happens automatically and the adjustment is made for you. You could receive a different adjustment each year, depending on the amount available in your COLA bank. View the 2026 COLA percentages. Will PERS 1 and TRS 1 receive a benefit increase?  If the legislature changes the current law, most of these retirees could receive a one-time increase in July. There are several bills that could affect this decision. You can track all bills here. 

As a result of legislation approved in 2026, certain retirees in Plan 1 of the Public Employees’ Retirement System and Plan 1 of the Teachers’ Retirement System (PERS 1 and TRS 1) will receive a one-time benefit increase in July 2026. Under the law, eligible PERS 1 and TRS 1 retirees will receive a one-time, permanent 3% increase in their monthly benefit, capped at $110.00 per month. The increase applies to PERS 1 and TRS 1 retirees receiving a monthly benefit on or before July 1, 2025. The adjustment does not apply to retirees who already qualify for an annual increase in 2026 through one of the existing minimum benefit provisions provided by the plans. The one-time increase will be reflected in retirement benefits paid at the end of July. Plan 1 benefit increase: Frequently Asked Questions What is SB 5862? SB 5862 was passed by the Legislature and signed into law by the governor during the 2026 legislative session. It provides a one-time, permanent increase of 3% (capped at $110.00 per month) to the monthly pension benefit of Public Employees Retirement System (PERS) Plan 1 and Teachers’ Retirement System (TRS) Plan 1 retirees. Who will receive the increase? PERS Plan 1 and TRS Plan 1 retirees who were receiving a monthly benefit on July 1, 2025 will receive this one-time increase. However, there are certain exceptions. Who will NOT be eligible for this increase? TRS Plan 1 retirees who are currently receiving a Temporary Disability retirement benefit PERS Plan 1 retirees currently receiving a Duty Disability Retirement Plan 1 retirees who will receive a Benefit Minimum Increase or an Adjusted Minimum Benefit COLA, as these benefits receive a separate annual increase Plan 1 Legal Order Payees who were not granted COLA eligibility in their Legal Order documents Note: This is not a complete list. Please see SB 5862 for specifics. If I’m eligible to receive this increase, how much will it be? The increase will be 3% (capped at $110.00) per month. When will I see the increase in my benefit? The increase will be reflected in your pension payment at the end of July. If I purchased service credit or an annuity, will those increases be included in this benefit increase calculation? Yes. If I chose the Auto COLA or the Age 65 COLA, how will these be impacted by this increase? If you selected the Auto COLA or Age 65 COLA, you will receive those increases first. Then the one-time permanent 3% increase will be calculated based on your adjusted benefit.

Taxes are known causes of headache, nausea and anxiety. But when you save with the Deferred Compensation Program (DCP) there are actual tax benefits that can cure your taxation woes. Well, at least a few of them! Here’s how taxes affect your DCP savings: DCP has a Roth and a pretax option. Each option affects when your retirement contributions will be taxed. Use this handy calculator to see which option is best for you. What is Roth? Your contributions are made after your income is taxed. When you take a withdrawal, the earnings associated with your Roth contributions will not be taxed if you meet the minimum qualifications. These qualifications include a five-year holding period from the year of your first contribution, and a minimum age of 59½. If you withdraw before meeting these qualifications, your earnings will be taxed. What is pretax? Your contributions are made before they are taxed. Withdrawals, including investment earnings, are taxed in the year you withdraw them. Every pretax dollar you contribute reduces your taxable income by a dollar. As a result, you’ll pay less in your current income taxes for the year because, in the eyes of the IRS, you’ve been paid less money. This can help reduce the impact on your overall take-home pay. You’ll pay taxes on the contributions and earnings in the year the money is distributed, which could mean a lower tax bracket during your working years. Contributions to DCP will not impact your pension or Social Security benefits. That’s because only federal income tax is deferred, not pension contributions or Social Security tax. The DCP – Deferred Compensation Program webpage has more tips and information about how saving with DCP has many advantages in addition to tax savings. If your employer doesn’t offer DCP, find out what retirement savings options you do have. Or think about opening a traditional pretax or Roth IRA through a financial institution. Overall tax considerations DRS and the investment record keeper Voya are not able to offer tax advice. Please work with a tax advisor if you have questions beyond the general information we can provide. Okay, disclaimer aside, here’s what we can tell you about your pension plan: For most people, whether you are in Plan 1, 2 or 3, your retirement contributions are deducted from your salary before taxes. This means these amounts have not been taxed (same as the pretax option available for DCP). Plan 3 doesn’t have a Roth option because current IRS laws don’t allow it. When you withdraw these funds, either as a withdrawal or in retirement, you will pay federal income tax on the money you receive. When we issue payment, DRS withholds IRS federal income tax for your distribution type. No matter what state you live in, we do not withhold state income tax. You will be responsible for determining any additional taxes owed when you receive a withdrawal or monthly pension payment. Tax tips The biggest tool you have is planning. Make sure your withholding information is accurate. Even if you don’t file your taxes until April each year, calculate them in January or February every year so you’ll know in advance whether you’ll owe. Did you get a refund this year? If you did, you overpaid your taxes and gave the government an interest-free loan. Think about the best way to use this year’s tax refund before you spend it on something you may want but don’t need. Use the refund to help build up your emergency savings, pay down debt, or get closer to achieving a personal savings goal. To help keep more of your money working for you throughout 2025 and beyond, consider increasing your contributions to DCP. Did you owe money this year? You can help change that next year by reducing your taxable income. Saving to DCP on a pretax basis can help you do that as well. With pretax saving, you’ll reduce your current taxable income and may also save money on the taxes you will eventually pay. It’s never too late to save for retirement or update your tax situation. Make this the year you take what you’ve learned to help improve your financial situation now and in the future.

During the 2026 session, DRS tracked bills that affected retirement, including pensions and benefits. Here are bills tracked, including summary descriptions from legislative reports: [table id=426 /] Bills marked with an asterisk (*) have passed, and bills with two asterisks (**) have been passed into law.