Chair seeks emergency COLA method after missing federal CPI report; actuary recommendation cited

Summary

The subcommittee considered SB724, an emergency measure to determine the state retirees' COLA after the Bureau of Labor Statistics did not publish an October CPI; the chair and staff said the recommended method (averaging September and November) was vetted by an actuary and produces a 2.698% COLA under that assumption.

The chair presented Senate Bill 724 as an emergency measure to set the methodology for calculating the state retirees’ cost‑of‑living adjustment after a missing October CPI due to a federal data publication lapse. The chair said the bill would treat October’s CPI as the average of September and November CPI values, yielding a COLA of 2.698% under that approach.

Agency staff said they had consulted the plan’s actuary and reviewed two reasonable alternative approaches: the September–November average (the sponsor’s recommendation) or an 11‑month average excluding October. They reported back‑testing both methods against the last four years of actual COLAs and found the September–November average tracked closest to the actual outcomes in most years.

Shandala Richburg, president of ASHLEE Maryland Retirees Chapter 1, urged a favorable report and emphasized that retirees on fixed incomes rely on COLAs to keep pace with rising costs of food, energy and housing.

Committee members did not object to taking up the emergency bill under the rationale provided; staff offered to provide actuarial details on request.