Updated October 30, 2026. Quick answer: The July 2026 COLA for Maryland State Retirement and Pension System retirees is 2.698%, announced April 15, 2026. The July 2027 COLA is not published yet: it is the change in the calendar year 2026 average CPI-U, with caps that differ by group and, in five systems, a 2.5% or 1% cap on service earned on or after July 1, 2011, depending on the systems’ investment return.
More on public pension retirement ages and eligibility: the Maryland MSRPS retirement age and eligibility rules for the Reformed Contributory Pension Benefit.
Estimate a Maryland Employees’ Pension System pension from benefit, service, age and average final compensation: Maryland state pension calculator.
How the Maryland COLA works
The State Retirement Agency says: “The COLA rate is determined by the calendar year over calendar year change in the annual average Consumer Price Index”, measured for all urban consumers and not seasonally adjusted. The statute puts a floor under it: “For any fiscal year in which the cost-of-living rate determined under subsection (c) of this section is less than 0%, the cost-of-living rate for that fiscal year shall be 0%.” And it delays the first one: “An initial cost-of-living adjustment may not be made until the second July 1 after the day preceding the effective date of an allowance.”
The cap on service on or after July 1, 2011
Section 29-408 of the State Personnel and Pensions article sets the cap for service earned on or after July 1, 2011 in the Correctional Officers’, Employees’ Pension, Law Enforcement Officers’, State Police and Teachers’ Pension systems: “2.5% if, for the calendar year ending December 31 in the preceding fiscal year, the total investment performance of the several systems equals or exceeds the assumed rate of investment return established by the Board of Trustees in accordance with § 21-125(c) of this article and in effect as of December 31 of the preceding fiscal year”. Otherwise the cap is 1%. For July 2026 the agency reported: “This year’s COLA rate is 2.698%. The System’s total investment performance for the calendar year ending on December 31, 2025 (+13.33%), exceeded the 6.8% assumed rate of investment return established by the Board of Trustees.”
The 2026 COLA
The agency’s April 15, 2026 release says: “Qualifying payees will see the adjustment in their July 2026 allowance payments, payable July 31, 2026.” It also says: “Those receiving an allowance based on a retirement that was effective after July 1, 2025 (August 2025 or later) will receive their first COLA increase in July 2027.” “This COLA does not apply to most payees of the Legislative Pension Plan and Judges’ Retirement System.”
Where 2027 stands
The July 2027 Maryland COLA rate is not published: it comes from the 2026 calendar-year CPI-U and the systems’ 2026 investment return, and this page updates when the State Retirement Agency announces it. Past releases were dated February 19, 2025 and April 15, 2026, so a February to April 2027 announcement is likely.
What this page does not cover
The caps are 3% or 5% for some older groups and none for others, and some payees get a simple rather than a compound adjustment, depending on plan and service period. Check the State Retirement Agency for your own plan.
Common mistakes
- Assuming 2.698% applies to all of a retirement allowance. In the five systems named in section 29-408, service earned on or after July 1, 2011 is capped at 2.5% or 1%.
- Expecting a COLA on the first July 1 after retiring. The statute puts the first one no earlier than the second July 1.
- Applying this COLA to the Judges’ Retirement System or the Legislative Pension Plan, which it mostly excludes.
Related: Maryland MSRPS retirement decisions, how public pension decisions work, and whether Maryland taxes pensions.
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Answer againSources
- Maryland State Retirement Agency, Cost-of-living adjustment (COLA) payable to eligible payees in July 2026: sra.maryland.gov
- Maryland General Assembly, Md. Code, State Personnel and Pensions, 29-402: mgaleg.maryland.gov
- Maryland General Assembly, Md. Code, State Personnel and Pensions, 29-408: mgaleg.maryland.gov
- Maryland State Retirement Agency, Eligible payees to receive a cost-of-living adjustment in July 2025: sra.maryland.gov
Read from the primary documents linked above on October 30, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the IRS itself is the right place to confirm anything consequential.