Two sets of public retirees are seeing their pension checks change this fall. New York’s state and local retirement systems are paying a 1.7% cost-of-living adjustment beginning with the September 2026 benefit, worth up to $25.50 a month, while more than 31,200 retired Pennsylvania public school employees are set to collectively receive about $104 million in cost-of-living payments for the 2026-27 fiscal year, including retroactive amounts for July and August. Neither increase requires an application; both are already built into the payment schedule.
What the raise notice doesn’t calculate: Neither state’s COLA announcement says how a bigger pension check shifts the mix of taxable income, IRMAA tier or RMD math The Retirement Tax & Withdrawal Planner walks through. See where a pension raise lands in the withdrawal order →
What New York’s 1.7% Actually Pays
New York’s Office of the State Comptroller states plainly that “this year’s COLA beginning September 2026 is 1.7 percent,” applied to a maximum of $18,000 of a retiree’s annual pension benefit, which caps the increase at $25.50 a month, or $306 a year, according to the New York State Comptroller’s cost-of-living adjustment page. Eligibility depends on age and years retired rather than a flat rule for everyone: non-uniformed retirees generally need to be at least 62 and retired at least five years, uniformed retirees (police, firefighters and similar roles) qualify at 55 with ten years retired or 62 with five, and disability retirees qualify after five years regardless of age. For members of the New York State Teachers’ Retirement System specifically, the NYSTRS press office confirms the same 1.7% adjustment begins with the September 30, 2026 pension payment.
How New York’s Percentage Is Actually Calculated
New York’s COLA is not set at the comptroller’s discretion each year; the same OSC page lays out a statutory formula under which “the annual COLA is 50 percent of the rate of inflation as determined by the Consumer Price Index at the end of the State fiscal year, March 31,” rounded up to the nearest tenth and bounded between a 1% floor and a 3% cap. That formula is why the 1.7% figure sits well below the 3.0% New York paid in 2022 and closer to the 1.2% paid in 2025, per the historical COLA table on OSC’s own page, and why the adjustment is described as “a permanent annual increase” rather than a one-time payment.
Pennsylvania’s Larger, One-Time-Looking Number Explained
Pennsylvania’s public school retirement system frames its increase differently: rather than a monthly percentage, PSERS describes “more than 31,200 PSERS retirees” sharing “$104 million in estimated COLA payments for fiscal year 2026-27,” on top of the “$7.7 billion members already receive annually,” according to the Pennsylvania Public School Employees’ Retirement System’s newsroom release. Unlike New York’s formula-driven adjustment, Pennsylvania’s release states that “under PSERS’ Retirement Code, only the General Assembly can authorize COLA increases for PSERS retirees,” and this round was approved by Gov. Josh Shapiro and the General Assembly through Senate Bill 146 as part of the state’s 2026-27 budget. Eligibility is also narrower than the headline count might suggest: PSERS limits the increase to members who retired on or before July 1, 2001, meaning it reaches a specific, older cohort of retirees rather than every PSERS beneficiary, and the exact percentage applied “varies based on a member’s retirement date” rather than one flat rate for all 31,200.
The PSERS Official Behind The Number
PSERS Executive Director Uri Monson credited lawmakers directly for the increase, saying “Pennsylvania’s public school retirees devoted decades to educating students,” in comments tied to the General Assembly’s approval of the adjustment, per the PSERS release. The same release states that about 97% of eligible retirees will see the adjusted payment in September, with the remaining roughly 3% needing additional processing time for individual account circumstances the release does not detail.
Two Different Formulas, One Common Retiree Question
New York’s percentage-based COLA and Pennsylvania’s fixed-dollar total are calculated under different state formulas, applied to different pension systems, but they land on the same practical question for a retiree in either state: how a pension increase interacts with everything else on a fixed income. Neither the OSC page nor the PSERS release addresses how the increase affects a retiree’s taxable income, Medicare premium tier or required withdrawals from other retirement accounts, since that math depends on a retiree’s full financial picture rather than the pension COLA rule alone.
Why Neither Increase Requires Filing Anything
Both adjustments are automatic for eligible retirees already receiving a pension: New York’s OSC page describes the COLA as something the state “automatically” adds once eligibility is met, prorating the first partial month, and PSERS’ release describes its payment as already scheduled through the normal pension-payment cycle rather than something a retiree applies for. That distinguishes both increases from the many benefit programs that require a separate claim or renewal, though a retiree who believes their payment is missing or wrong would still need to contact their own system’s member-services office directly, since neither release lists an appeals process for a miscalculated COLA. New York’s system covers retirees under the New York State and Local Retirement System, which includes the Employees’ Retirement System and the Police and Fire Retirement System among its component plans, while Pennsylvania’s applies specifically to the Public School Employees’ Retirement System rather than the commonwealth’s separate state-employee pension fund, so a retiree checking eligibility needs to confirm which system, and which retirement date, actually governs their own benefit.
What Two State Pension Raises Have In Common With Every Retirement Budget
New York’s 1.7% COLA and Pennsylvania’s PSERS cost-of-living increase both change the size of a monthly pension check starting this fall, but neither state’s notice works out how that change affects a retiree’s taxable income, Medicare premium bracket or the order retirement accounts should be tapped. That reconciliation is left to the retiree.
The Retirement Tax & Withdrawal Planner includes four calculators covering provisional income, IRMAA tier and RMD scheduling, plus the account withdrawal order that determines which account a retiree draws from first.
Work out where a pension increase fits using The Retirement Tax & Withdrawal Planner.
This article was produced with AI assistance and checked against the primary sources linked above.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
