Updated October 30, 2026. Quick answer: Maryland LEOPS may apply a COLA to the allowance each July, tied to the CPI. The July 2026 COLA was 2.698% on service earned before July 1, 2011 and 2.5% on service earned on or after July 1, 2011. The 2027 rate is not set yet: the State Retirement Agency announces it each year, and a payee must have been retired at least one year as of July 1.
How the LEOPS COLA is set
The Maryland State Retirement Agency’s 2026 release explains: “The COLA rate is determined by the calendar year over calendar year change in the annual average Consumer Price Index”. The Agency’s COLA page says: “A member must be retired at least one year as of July 1 to be eligible to receive that year’s increase.” Rules are set out in “Md. Code Ann., State Personnel and Pensions Article, Title 29, Subtitle 4”.
The caps
The LEOPS handbook describes the cap for newer members: “Eligible retirees will receive a COLA capped at 2.5% when the SRPS’s investment performance equals or exceeds its assumed actuarial rate of return or capped at 1% in years when the assumed actuarial rate is not met.”
For members enrolled before July 1, 2011, the handbook says a two-part adjustment generally applies, and for the first part: “For the portion of the benefit based upon service earned before July 1, 2011, the COLA rate for eligible retirees is capped at 3% and is not tied to investment performance.” The 2026 release gives the reason the newer cap was 2.5% this year: “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.”
Who gets it and who is left out
The 2026 release says: “A payee must be receiving an allowance based upon a retirement that was effective on or before July 1, 2025, to receive this year’s COLA.” Those retired later wait: “will receive their first COLA increase in July 2027”.
The release also covers a group with a different rate: “Transferees from the Employees’ or Teachers’ Retirement System under Selections A or B who did not elect to participate in the Law Enforcement Modified Pension Benefit. will receive 2.698% if subject to Selection A or Selection B.” The handbook adds that different COLA provisions may apply for certain members who transferred, so contact the Retirement Agency.
The 2026 COLA and where 2027 stands
The 2026 release gives the rate for LEOPS: “2.698% on the portion of the allowance based on creditable service earned before July 1, 2011, and 2.5% on the portion earned on or after July 1, 2011.” It is paid in the “July 2026 allowance payments, payable July 31, 2026”.
The 2027 LEOPS COLA rate is not set yet: it depends on the 2026 calendar year change in the CPI and, for service earned on or after July 1, 2011, on whether the system’s 2026 investment return sets the cap at 2.5% or 1%, and this page updates when the State Retirement Agency announces it.
The Agency’s COLA page says: “The COLA rate is announced every year under News.” One gap to know about: the statute itself was not among the sources read, so the rules above come from the Agency’s release and handbook.
Common mistakes
- Treating the 2026 rate as the 2027 rate. The rate follows the CPI each year; for service earned on or after July 1, 2011 the cap depends on the system’s investment return.
- Applying one rate to the whole allowance. Service earned before July 1, 2011 and service earned on or after that date are treated separately.
- Expecting a COLA in the first year of retirement. A payee must be retired at least one year as of July 1.
Related: Maryland LEOPS 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 State Retirement Agency, Cost-Of-Living Adjustments (COLA) page: sra.maryland.gov
- Maryland State Retirement Agency, Benefits Handbook, Law Enforcement Officers’ Pension System: sra.maryland.gov
- Related official page (not quoted): IRS Tax Topic 410, Pensions and annuities: www.irs.gov
- Related official page (not quoted): IRS Tax Topic 411, Pensions: the General Rule and the Simplified Method: www.irs.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.