Annual Cost of Living Adjustment for Eligible Maryland State Retirees
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Annual Cost of Living Adjustment for Eligible Maryland State Retirees-2021

Jun 9, 2021 | Maryland Law

By Molly Friedman, Esq., 301.563.6685

As of July 1, 2021, eligible State of Maryland Employees will receive an annual cost-of-living adjustment (COLA) of 1.234%. In order to qualify for the annual COLA, an individual must have been retired for a minimum of 1 year. This COLA does not apply to retired Maryland legislators, governors, or judges.

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.  The COLA adjustment may be capped for certain retirees depending on the COLA and underlying information used to calculate it.

Additionally, for Employees’ or Teachers’ Pension System, Law Enforcement Officers’ Pension System, Maryland State Police System or Correctional Officers’ Retirement System, retirement amounts based on service credit earned on or after July 1, 2011 is subject to a cap. For each year, if MSRPS investment funds meet or exceed the assumed rate of return, COLA increase for those individuals is capped at 2.5%. However, if the MSRPS investment funds fail to meet the goal, the COLA increase is capped at 1%. However, in 2019 the investment fund target was met and the resulting  COLA increase in July 2020 was low enough that there were no issues with caps for different retirement systems.

If you are an eligible retired State of Maryland Employee, the impact of the annual COLA increase on your benefit amount depends on your benefit system. For most retirees, the COLA increase is applied to your current benefit amount. This allows for your benefits to continually increase with each COLA.  For retirees under the Local Fire and Police System and Employee’s Non-Contributory Pension System, the annual COLA is calculated using the initial retirement allowance.

State of Maryland employees who retired on or after July 1, 2021 will be eligible for the annual COLA beginning July 2022. Further details regarding the COLA increase for July 2021 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 or call 301.563.6685