July payment will include COLA of 3% on the first $13,000 of your benefit
The Governor and Legislature have approved a cost-of-living adjustment (COLA) as part of the Commonwealth’s FY2027 budget. Effective July 1, 2026, this COLA provides an increase of three percent on the first $13,000 of your retirement benefit, for a maximum increase of $390 per year or $32.50 per month (3% x $13,000/year = $390/year; $390/year ÷ 12 months = $32.50/month).
You are eligible to receive this COLA if you are:
- a retiree who retired on or before June 30, 2025;
- a survivor of an Option C retiree who retired on or before June 30, 2025;
- a survivor of a member who died while in active service on or before June 30, 2025; or,
- an accidental death benefit recipient whose benefit began on or before June 30, 2025.
If you are eligible to receive this COLA, it will be included in your July 2026 payment and, if you receive your payment via direct deposit, you will receive a mailed statement this month. Your monthly gross amount for July will then be your new monthly gross amount until any future COLAs are granted.
As a reminder, retirement and survivor benefits are paid for time already accrued; the allowance you receive at the end of July is the payment for July.
For more information, see Your Benefit Payment › Cost-of-Living adjustments and How to read your check or direct deposit statement.
Future COLA enhancements approved in FY2027 budget
Important: The following COLA enhancements are not effective immediately. They will become available only after the newly established COLA Reserve Fund has accumulated enough assets to fully fund the benefit.
COLA Reserve Fund: The budget establishes a new COLA Reserve Fund based on recommendations of the Special COLA Commission. The fund will be financed by setting aside 7.5% of annual PRIT investment earnings that exceed the actuarial assumed rate of return. Once sufficient assets have accumulated, the fund may be used to finance future increases to the COLA base and an enhanced COLA benefit for certain long-serving retirees.
Enhanced COLA Benefit: Once the COLA Reserve Fund reaches the required funding level, certain MTRS retirees become eligible for an additional annual COLA amount. Eligibility includes retirees who:
- retired before July 1, 2020;
- have at least 20 years of creditable service; and
- receive a retirement allowance that is less than 80% of the average salary for their retirement system.
Eligible retirees would receive an additional annual benefit based on the length of time they have been retired:
- 10 to less than 15 years: $100
- 15 to less than 20 years: $200
- 20 years or more: $300
Changes to working after retirement regulations
As part of the FY2027 State Budget, the earnings limitation for retirees working in a Massachusetts Public Sector job has been increased. If you have been retired for a full calendar year, you may now earn an additional $25,000 per year, retroactive to January 1, 2026. This replaces the previous $15,000 limit. Reminder: it is up to you and your employer to keep track of your hours and earnings.
click here for more information about working after retirement.
Enjoy the rest of your summer!