Maryland's 2023 COLA (Cost of Living Adjustment) for Retirees
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Breaking Down Maryland’s 2023 Cost of Living Adjustment for Retirees: What You Need to Know

May 8, 2023 | Articles, MD State Retirement System

As occurs most years, the Maryland State Retirement and Pension System (MSPRS) has announced the annual cost of living adjustment (COLA) rate.

For 2023, the COLA adjustment is 8.003%. However, the actual COLA applied to a retiree’s benefits is impacted by the benefit system retired under, and in some cases, the dates and length of service. Most people will not experience a full 8.003% increase in their benefits.

In order to qualify for the annual COLA, an individual needed to have retired on or prior to July 1, 2022.

Individuals who retired after July 1, 2022 will need to wait until July 2024 to receive their first COLA. The rate of the annual COLA is determined based upon changes in the Consumer Price Index as of December 31st of the previous year and the rate of return of Maryland State Retirement and Pension System (MSRPS) funds.

Most of the retirement systems include a fee cap in calculating the COLA for their members.  In years such as 2022, when the investments made by MSRPS for the previous year do not exceed the statutory assumed rate of investment, many retirees will be subject to only a 1% COLA increase for all or part of their benefits.

For individuals in the Correctional Officer’s Retirement System and the State Police Retirement System, the 8.003% COLA is applied to portion of allowance based on creditable service earned before July 1, 2011, and 1% on the portion earned on or after July 1, 2011.

For the Employees’ and Teachers’ Retirement System, the COLA depends on whether they are subject to Selection A, B, or C. For employees subject to Selection A (additional member contributions) the COLA is 8.003%. For employees subject to Selection B (Limited COLA), the COLA applied is capped at 5%. If an employee is subject to Selection C (combination formula) a 3% COLA is applied to the portion of service earned after selection option C. Any portion of service that occurred while subject to Selection A or Selection B is calculated to reflect the COLA for that Selection.

For most individuals covered by the Law Enforcement Officer’s Pension System, a 3% COLA is applied to portion of allowance based on creditable service earned before July 1, 2011, and 1% on the portion earned on or after July 1, 2011. For individuals who transferred from the Employees’ or Teachers’ retirement system who did not elect to participate in the Law Enforcement Modified Pension Benefit, the calculation is based on the Selection made while part of the Employees’ and Teachers’ Retirement System- individuals subject to Selection A receive an 8.003% COLA, and individuals subject to Selection B receive a 5% COLA.

Lastly, a 3% COLA is applied to all members of the Local Fire and Police System.  There is an exception for individuals who transferred from the Employees’ Retirement System, who will receive an 8.0003% COLA.  The COLA does not apply to most payees of the Legislative Pension Plan and Judges’ Retirement System.

State of Maryland employees who retired on or after July 1, 2022 will be eligible for the annual COLA beginning July 2024.

Further details regarding the COLA increase for July 2024 will be available closer to that time. Here at the law firm of Andalman & Flynn, P.C., we’ve successfully helped hundreds of State of Maryland employees obtain disability retirement. We are happy to answer any questions regarding your State of Maryland Disability Retirement.


About Andalman & Flynn, P.C.: Founded in 1998 in downtown Silver Spring, Maryland, Andalman & Flynn has forged a distinguished reputation for legal excellence. The firm represents individuals seeking disability benefits throughout the country and practices family law throughout Maryland and the District of Columbia. The firm focuses on cases that impact the rights of everyone, and are there for clients when responsive legal help is most critical. The firm has provided legal analysis on national and local television and radio, and their attorneys often testify before legislative bodies and are routinely invited to contribute to prominent legal publications. For more information about Andalman & Flynn, please visit the website at andalmanflynn.com or call 301.563.6685.