By Molly Friedman, Esq., 301.563.6685
Cost-Of-Living Adjustments for Retired Maryland Employees
As of July 1, 2020, eligible State of Maryland employees received an annual cost-of-living adjustment (COLA) of 1.812%. To qualify for the annual COLA, an individual must have been retired for a minimum of one year. This COLA does not apply to retired Maryland legislators, governors, or judges.
The annual COLA is determined based on changes in the Consumer Price Index as of December 31 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, the COLA increase for those individuals is capped at 2.5%. However, if the MSRPS investment funds don’t 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.
Understanding Your Benefits
If you’re an eligible retired State of Maryland employee, the impact of the annual COLA increase on your benefit amount depends on your benefits 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, 2020, are eligible for the annual COLA beginning July 2021. Further details are available regarding the COLA increase for July 2021. At the law firm of Andalman & Flynn, P.C., we’ve successfully helped hundreds of State of Maryland employees obtain disability retirement.
We’re happy to answer any questions regarding your State of Maryland Disability Retirement.
Choose Andalman & Flynn for Exceptional Legal Services
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.
Contact our team online or call (301) 563-6685 for more information about Andalman & Flynn.