MITCHELL, SD (Mitchell Now) — South Dakota’s public employee retirement system is expected to lag behind inflation for the sixth consecutive year, according to system officials.

Administrators say they anticipate a cost-of-living adjustment (COLA) of 1.56% in 2027, a figure that is projected to fall short of inflation trends.

Since 2021, inflation has increased by more than 2% annually, outpacing the retirement system’s adjustments and raising concerns about the long-term purchasing power of retirees.

The retirement system provides benefits for a wide range of public workers, including teachers, state employees, and most local government workers across South Dakota.

In total, more than 105,000 members rely on the system for retirement income.

Officials say the COLA is determined by a set formula designed to maintain the system’s financial stability while still providing some level of adjustment for retirees.

However, with inflation continuing to exceed the annual increase, retirees may continue to feel the impact of rising costs in areas such as housing, healthcare, and everyday expenses.

The trend highlights ongoing challenges for pension systems nationwide as they attempt to balance sustainability with keeping pace with inflation.