Updated October 30, 2026. Quick answer: Massachusetts MTRS COLAs are not automatic: the Legislature votes each year on whether to grant one, based on the CPI increase or 3%, whichever is less, applied only to the first $13,000 of the retirement benefit. The latest is 3% on $13,000 effective July 1, 2026 (fiscal year 2027), for retirees and the survivors and recipients MTRS lists whose benefits began by June 30, 2025. That is a maximum increase of $390 a year or $32.50 a month. The COLA for July 2027 is not set.
More on public pension retirement ages and eligibility: the Massachusetts MTRS retirement age and eligibility rules for Tier 1 and Tier 2.
How an MTRS COLA is granted
The MTRS retirees page says: “Cost-of-living adjustments are granted to MTRS benefit recipients by vote of the Massachusetts Legislature.” “The Legislature then votes whether to grant a COLA based on the increase in the CPI or 3%, whichever is less.” The base is stated this way: “Currently, the retirement base on which a COLA is granted is $13,000.”
The statute, M.G.L. chapter 32 section 102, reads: “If the general court thereafter determines by law that a cost of living increase is required and establishes the percentage thereof”. “In any case where such former employee, spouse, or other beneficiary is receiving an annual retirement allowance, pension or annuity which is $13,000 or more exclusive of additional annuity obtained by special purchase under paragraph (g) of subdivision (1) of section 22 or any similar law, the cost of living adjustment shall be in an amount determined by applying the percentum of change determined pursuant to paragraph (a) to the sum of $13,000.”
The 2026 COLA
MTRS’s announcement of July 13, 2026 states: “Effective July 1, 2026, this COLA provides an increase of three percent on the first $13,000 of your retirement benefit, for a maximum increase of $390 per year or $32.50 per month”. On who gets it: “You are eligible to receive this COLA if you are: a retiree who retired on or before June 30, 2025; a survivor of an Option C retiree who retired on or before June 30, 2025; a survivor of a member who died while in active service on or before June 30, 2025; or, an accidental death benefit recipient whose benefit began on or before June 30, 2025.”
Recent years
The MTRS retirees page lists the same rate on the same base in recent years:
| COLA year | Increase |
|---|---|
| 2023 | 3% of $13,000 |
| 2024 | 3% of $13,000 |
| 2025 | 3% of $13,000 |
| 2026 | 3% of $13,000 |
Where 2027 stands
The COLA for July 2027 is not set: the Legislature votes on each one, and this page updates when MTRS announces it. MTRS also says a COLA Reserve Fund must build up before the base can rise: “Once sufficient assets have accumulated, the fund may be used to finance future increases to the COLA base”.
Common mistakes
- Expecting a COLA every year. The Legislature votes on each one.
- Applying the percentage to the whole pension. It applies only to the first $13,000 of the retirement benefit.
- Assuming a higher base is coming. MTRS says the fund must accumulate assets first.
Related: Massachusetts MTRS retirement decisions, how public pension decisions work, and whether Massachusetts taxes pensions.
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Answer againSources
- Massachusetts Teachers’ Retirement System, Cost-of-living adjustments (MTRS Retirees page): mtrs.state.ma.us
- Massachusetts Legislature, M.G.L. c.32 section 102: malegislature.gov
- Massachusetts Teachers’ Retirement System, FY2027 State Budget Includes COLA, Future COLA Enhancements & Higher Post-Retirement Earnings Limit: mtrs.state.ma.us
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.