An interruption in economic data reporting from the federal government has presented a challenge in calculating the rate for payees’ July 2026 cost-of-living adjustment. Despite this challenge, retirees can be assured that this year’s COLA increase will be paid.

What is the COLA?

Retirees of the Maryland State Retirement and Pension System count on the annual cost-of-living adjustment to help mitigate the impact of inflation on their benefits. The rate of the annual COLA increase is based on a formula set in state law. The COLA formula uses the annual average of Consumer Price Index figures generated by the federal government. The Consumer Price Index, or CPI, measures the increases in prices for consumer goods and services. 

After the COLA rate is calculated using this formula, legislative caps may limit the amount applied to benefit payments. These caps do not affect how the COLA rate is computed; the caps simply limit maximum increase. 

For more information on the COLA, click here.

What is the problem?

The U.S. Bureau of Labor Statistics cancelled the release of a Consumer Price Index figure for October 2025. This data is unavailable due to last year’s federal government shutdown. This number is needed for the COLA formula.

The COLA formula for this year, as prescribed by current state law, is shown below. Because a CPI figure for October 2025 will not be generated, the value in red is not available for the formula. This makes the existing COLA formula unworkable. 

What is the solution?

The Maryland State Retirement Agency, under the leadership of its Board of Trustees, is working with the Maryland General Assembly to resolve this matter and protect payees’ important COLA benefit. Updates will be posted online at sra.maryland.gov.