State Retirement and Pension System – Cost–of–Living Adjustments – Clarification, the official text

WES MOORE, Governor                                        Ch. 56

Chapter 56

                   (House Bill 1138)

AN ACT concerning

State Retirement and Pension System – Cost–of–Living Adjustments –
                                            Clarification

FOR the purpose of clarifying the Consumer Price Index used to determine the
         cost–of–living adjustments for retirees of the State Retirement and Pension System
         in certain years; and generally relating to calculating the Consumer Price Index
         change for cost–of–living adjustments for retirees of the State Retirement and
         Pension System.

BY repealing and reenacting, without amendments,
         Article – State Personnel and Pensions
         Section 20–101(a) and (d), 29–401(d) and (f), and 29–402(c) and (d)
         Annotated Code of Maryland
         (2024 Replacement Volume and 2025 Supplement)

         SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:

                   Article – State Personnel and Pensions

20–101.

(a) In this Division II the following words have the meanings indicated.

         (d) “Allowance” means a benefit that is payable in equal monthly installments for
the life of the recipient, except as otherwise provided for an optional form of an allowance
under § 21–403 of this article.

29–401.

         (d) “Consumer Price Index” means the annual average Consumer Price Index (all
urban consumers, United States city average, all items, not seasonally adjusted, 1982–1984
= 100) for the calendar year ending December 31 as published by the United States
Department of Labor, Bureau of Labor Statistics.

         (f) “Cost–of–living rate” means the rate computed in accordance with § 29–402(c)
of this subtitle that is used to determine a cost–of–living adjustment.

29–402.

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Ch. 56  2026 LAWS OF MARYLAND

         (c) (1) Except as provided in paragraph (2) of this subsection, and subject to
subsection (f) of this section, to determine the cost–of–living rate used to adjust an
allowance in a fiscal year, the Board of Trustees shall:

                           (i) subtract the Consumer Price Index for the calendar year ending
December 31 in the second preceding fiscal year from the Consumer Price Index for the
calendar year ending December 31 in the preceding fiscal year; and

                           (ii) divide the amount determined under item (i) of this paragraph
by the Consumer Price Index for the calendar year ending December 31 in the second
preceding fiscal year.

                  (2) The cost–of–living rate used to adjust an allowance in a fiscal year may
not exceed any cost–of–living rate cap that is applicable to the allowance under § 29–404(c),
§ 29–405(c), § 29–406(c), or § 29–408(c) of this subtitle.

         (d) (1) A cost–of–living adjustment payable in a fiscal year shall be determined
as provided in this subsection.

                  (2) For a compound cost–of–living adjustment, the cost–of–living
adjustment as of July 1 of a fiscal year shall be determined by multiplying the
cost–of–living rate determined in subsection (c) of this section by the sum of:

                           (i) the initial allowance; and

                           (ii) the accumulated cost–of–living adjustment amount.

                  (3) For a simple cost–of–living adjustment, the cost–of–living adjustment
as of July 1 of a fiscal year shall be determined by multiplying the cost–of–living rate
determined in subsection (c) of this section by the initial allowance.

         SECTION 2. AND BE IT FURTHER ENACTED, That:

         (a) (1) In this section the following words have the meanings indicated.

                  (2) “CPI Value” means the Consumer Price Index value (all urban
consumers, United States city average, all items, not seasonally adjusted, 1982–1984 = 100)
for a month, as published by the U.S. Department of Labor, Bureau of Labor Statistics.

                  (3) “October 2025 Index Value” means the Consumer Price Index value for
the month of October 2025, as determined by this section.

         (b) This section applies to the Consumer Price Index for the calendar year ending
December 31, 2025, for purposes of calculating the cost–of–living rate used to adjust an
allowance under § 29–402(c) of the State Personnel and Pensions Article effective July 1,
2026, and July 1, 2027.

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WES MOORE, Governor  Ch. 56

         (c) The October 2025 Index Value is the sum of the CPI Values for September
2025 and November 2025, divided by 2.

         SECTION 3. AND BE IT FURTHER ENACTED, That this Act is an emergency
measure, is necessary for the immediate preservation of the public health or safety, has
been passed by a yea and nay vote supported by three–fifths of all the members elected to
each of the two Houses of the General Assembly, and shall take effect from the date it is
enacted.

Approved by the Governor, April 14, 2026.

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