Updated October 30, 2026. Quick answer: The Pennsylvania Municipal Retirement System (PMRS) has no system-wide COLA: a retiree gets one only if the municipality’s own plan provides it, or if the municipality allocates excess interest to its retirees. Act 21 of 2026 separately directs PMRS to pay a special COLA of $75, $150 or $300 a month to retired municipal police officers and firefighters, by years retired. No 2027 figure is published.
What PMRS says about a COLA
The PMRS COLA page says: “If your individual plan provides a COLA, you will be eligible for a COLA increase. It is possible that your municipality may allocate excess interest to its retirees which will produce an increase in the monthly benefit.”
What the law limits
The Pennsylvania Municipal Retirement Law allows increases from a plan’s share of excess investment earnings: “In accordance with the plan contract, provide cost-of-living increases from a plan’s share of excess investment earnings to those members of such municipalities who have already retired.” It also limits them: “An award of excess interest shall not be made under this paragraph if the plan is less than 95% funded as of the plan’s most recent filing of the actuarial report required under the Municipal Pension Funding Standard and Recovery Act.”
Act 21 of 2026
PMRS describes the new act: “Act 21 of 2026 was signed into law by Governor Shapiro. This directs PMRS to provide a Cost-of-Living Adjustment (COLA) for Retired Municipal Police Officers and Firefighters.” The eligibility test begins: “Have begun receiving benefits before January 1, 2021, and”. Its first tier reads: “$75: Member has been retired 5 to 10 years as of 1/1/2026 (1/1/2016-12/31/2020)”. On timing: “Payments will be made as soon as administratively feasible, retroactive to August 1, 2026.” The PMRS calculation note says the amount is reduced by 65% of the total amount of prior COLAs awarded between 12/31/2001 and 1/26/2026.
The excess-interest route
The 2025 annual report says: “PMRS did not award excess interest for 2024.” It also reports an excess interest award of $50.6 million, based on the results of the 2023 annual report and distributed in 2025.
What the documents do not say
The text of Act 21 itself is not archived, and the PMRS page prints no signing date. PMRS does not publish per-plan COLA terms, so the plan contract in your own municipality decides. The Act 15 text read is accurate only through 2010.
Where 2027 stands
No 2027 PMRS figure is published: each plan’s COLA follows its own contract, and the pages read name no 2027 excess-interest award or Act 21 amount.
Common mistakes
- Expecting a PMRS-wide percentage. The COLA, if any, comes from your municipality’s plan contract.
- Applying Act 21 to survivors or to retirees who began benefits in 2021 or later. The page limits it to police officers and firefighters who began benefits before January 1, 2021.
- Reading an excess-interest award as a COLA formula. The board determines the award annually; cash balance plans receive it automatically, and in defined benefit plans the municipality’s governing body allocates it.
Related: Pennsylvania PMRS retirement decisions, how public pension decisions work, and whether Pennsylvania taxes pensions.
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Answer againSources
- Pennsylvania Municipal Retirement System, Cost-Of-Living Allowance (COLA): pmrs.pa.gov
- Pennsylvania Municipal Retirement System, Pennsylvania Municipal Retirement Law, Act 15 of 1974 (accurate through 2010): pmrs.pa.gov
- Pennsylvania Municipal Retirement System, Act 21 of 2026: pmrs.pa.gov
- Pennsylvania Municipal Retirement System, 2025 Annual Comprehensive Financial Report: pmrs.pa.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.