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COLA & HIS Payments

Cost-of-Living Adjustment (COLA) - ORP

When you elect to begin receiving retirement payments, your benefit stream will be determined by the type of payment contract you select:

  • If you select a form of distribution other than an annuity (such as a lump-sum distribution or periodic payments), no cost-of-living adjustment (COLA) will be available.
  • If you select a fixed-income annuity with no adjustment for inflation (less expensive than an annuity with inflation protection), your payment amount will be set at retirement and will continue unchanged for the remainder of your life (or for a fixed payment period as established by contract).
  • If your investment provider offers an annuity with a cost-of-living adjustment as a distribution option, and you choose this more expensive type of annuity, your initial payment amount will be set at retirement and will increase periodically by the contracted amount for the remainder of your life (or for a fixed payment period as established by contract).
  • If you select a variable income annuity, your payments may fluctuate based on the investment returns of the annuity underwriter. Variable contracts are often considered to provide the investor with some inflation protection.

No other cost-of-living increases apply to your ORP benefits.

Cost-of-Living Adjustment (COLA) - FRS Plans

Florida law provides FRS Pension Plan retirees (including DROP participants) and their surviving beneficiaries with an annual three percent cost-of-living adjustment, effective July 1 of each year. (Checks received at the end of July and in following months will include the increase.) The increase is calculated based on the amount of the June benefit, excluding any health insurance subsidy payment the payee may receive. If a retiree has not been retired for a full year, his/her first cost-of-living increase is prorated based on the number of months he/she was retired as of July 1.
For members of the FRS Investment Plan, as described for ORP retirees above, the benefit stream is determined by the type of payment contract selected. No other cost-of-living increases apply to benefits received under this plan.

Health Insurance Subsidy (HIS) - ORP

Participants in the SUSORP are not eligible to receive HIS payments for any period of time they were covered under the ORP 1. However, if an ORP participant has creditable service under the FRS when he/she retires, the retiree may be eligible for a monthly HIS payment based on the FRS service, as described below.

Health Insurance Subsidy (HIS) - FRS Plans

The Retiree Health Insurance Subsidy (HIS) is a monthly amount that may be available to supplement retirement benefits under the FRS Pension Plan and the FRS Investment Plan. The HIS program was established to assist eligible retirees of state-administered retirement systems in paying the cost of health insurance coverage. The retiree (or joint annuitant, if the member is deceased) is responsible for applying for the HIS.
Retirees in DROP are not eligible for HIS payments until their program participation ends. The law also excludes retirees who are receiving free health insurance coverage from the state and certain other groups who receive supplemental or non-service-based retirement benefits (such as the SUSORP 1).
Under both plans, eligible retirees and eligible surviving beneficiaries will receive $5 per month for each year of creditable service completed at retirement, with a minimum monthly payment of $50 and a maximum monthly payment of $150. To be eligible to receive the HIS, both Pension Plan and Investment Plan retirees are required to provide proof of health insurance coverage, which can include Medicare or Tricare.
To be eligible to receive the HIS, an FRS Investment Plan retiree must have met the age or service requirements to qualify for normal retirement under the FRS Pension Plan as described in the Retirement & DROP Section. An FRS Pension Plan member will qualify for the HIS benefit upon taking early, normal, or deferred retirement.
Under the FRS Pension Plan, any spouse or eligible financial dependent who receives a member's monthly retirement benefit may also receive the subsidy. Under the FRS Investment Plan, only the deceased retiree's spouse may receive the HIS.
1 By law, SUSORP participants are excluded from receiving HIS payments ( see s. 112.363, F.S.) Rather than receiving the monthly subsidy payment as retirees, active ORP participants instead receive the contributions that would otherwise fund the benefit as monthly payments made directly into their ORP account(s).
E-mail your SUSORP comments or questions to us. Please include your name, mailing address, e-mail address, the last four digits of your social security number (SSN), and your phone number if you require an answer from us.