New York’s public-pension retirees receive a 1.7% cost-of-living adjustment with the end-of-September payment, dated Sept. 30, 2026, and a statutory ceiling decides how much of it lands in the account. The New York State and Local Retirement System (NYSLRS) applies the percentage only to the first $18,000 of an annual pension, which caps the increase at $25.50 a month, or $306 a year. Under that arithmetic, a retiree collecting $60,000 a year and one collecting $20,000 see the same dollar raise.
How an $18,000 base turns 1.7% into $25.50 a month
The Office of the State Comptroller’s COLA page, revised in August 2026 and read on Sept. 30, lists the current-year figures: 1.7% beginning September 2026, a maximum of $18,000 of the annual pension benefit that the adjustment can touch, a maximum monthly increase of $25.50 and a maximum annual increase of $306. The office is headed by Comptroller Thomas P. DiNapoli, and NYSLRS is the system it administers.
The multiplication is simple. Some 1.7% of $18,000 is $306, and $306 spread over twelve payments is $25.50. Because the base stops at $18,000, every dollar of pension above that line earns no adjustment at all. The same $306 therefore equals about 1.53% of a $20,000 pension but only about 0.51% of a $60,000 one, a gap that widens with every step up the pay scale.
Why a 3.26% price jump produced a 1.7% raise
New York does not pass inflation through in full. The New York State Teachers’ Retirement System (NYSTRS) explains that the percentage is 50% of the Consumer Price Index increase from one March to the next, rounded up to the nearest tenth, and can be no less than 1% and no more than 3% a year. For the September 2026 through August 2027 period, NYSTRS reports a 3.26% CPI increase between March 2025 and March 2026. Half of that is 1.63%, which rounds up to the 1.7% now being paid.
Two tiers of protection are built into the design: a floor that guarantees at least 1% in a low-inflation year and a ceiling that limits the raise to 3% in a high one. In 2026 the raise sits in the middle, but it is still roughly half of what prices rose over the same twelve months.
Who receives the September increase automatically
No application is involved. The Comptroller’s page states that the COLA is added beginning with the pension payment received the month after a retiree becomes eligible, and it says a notice showing the change is mailed at the end of September. Eligibility follows the retirement category:
- Non-uniformed service retirees: at least age 62 and retired at least five years.
- Uniformed employees such as police, firefighters and correction officers: at least age 55 and retired at least ten years, or at least age 62 and retired at least five years.
- Disability retirees: retired at least five years, at any age.
Beneficiaries qualify when the retiree would have. Accidental death beneficiaries need five years of benefit payments. A surviving spouse receiving a lifetime benefit gets half of the retiree’s adjustment, which works out to a maximum of $12.75 a month at the current cap.
Pensions under $18,000 receive a proportional raise
The $25.50 figure is a ceiling, not a typical outcome. NYSTRS states in its Sept. 30 payment announcement that only members with a maximum retirement benefit of $18,000 or more receive the full monthly amount, and those below that level receive proportionally smaller increases. On that basis, a $12,000 annual pension would gain 1.7% of $12,000, or $204 a year, which is $17 a month. The percentage stays at 1.7% for every pension up to the cap, and then the dollar amount stops rising.
How the raise compares with Social Security and with taxes
The Social Security Administration’s most recent adjustment was 2.8%, effective December 2025 and payable in January 2026, and it applies to the whole benefit rather than a capped slice. A retiree with a $2,000 monthly Social Security check therefore gained $56 a month in January, more than twice the New York maximum pension increase, though the two adjustments arrive from different programs on different schedules.
Pension income is also generally taxable. The IRS explains in Topic 410 that pension and annuity payments are fully taxable when no after-tax contributions were made, and that the taxable part is generally subject to federal income tax withholding, adjustable with Form W-4P. A raise of $306 a year is therefore smaller after tax, and the size of that reduction depends on the retiree’s bracket and other income.
Twenty-six years of capped increases
New York’s automatic COLA dates to legislation enacted in 2000, and each year’s adjustment has been added on top of the last. NYSTRS reports that the cumulative maximum monthly increase since the 2000 legislation now stands at $552, the most a retiree drawing at least $18,000 a year could have gained across every adjustment. The Comptroller’s page continues to describe the 2026 figure as 1.7% on the first $18,000, paid with the end-of-September pension.
Retirement income beyond the pension check
Older households that combine a public pension, Social Security and retirement-account withdrawals are often unsure how each added dollar of income changes the tax on their Social Security benefit. Sorting that out means working through provisional income, bracket limits and the order in which accounts are drawn down.
The Retirement Tax & Withdrawal Planner is a 12-page planner with four calculators (provisional income, IRMAA tier, RMD schedule and Roth bracket fill) and an account withdrawal order that a reader can use to compare how added income changes the tax picture.
Grab The Retirement Tax & Withdrawal Planner to run the provisional income calculator →
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.
