- Tiers 1 and 2 get their first cost-of-living adjustment (COLA) on July 1 of the year they turn 65. Tiers 3 and 4 wait until July 1 of the year they turn 67. If you retire later than that, the first COLA comes on July 1 of the year after you retire.Member Handbook 2025, p. 21, Cost of Living Adjustment; NMERB web page Cost of Living Adjustment (updated May 29, 2026)
- The COLA on July 1, 2026 is 1.80% for retirees with 25 or more years of service whose benefit is at or below the median of $1,834.85 a month, and 1.60% for all other retirees. Disability retirees of at least three years get 2.0%. Members who retired in 2026 get no COLA until 2027.2026 COLA letter (Jan. 19, 2026), p. 2; NMERB web page Cost of Living Adjustment (updated May 29, 2026)
- How the COLA works when the fund is fully funded: half the CPI increase, between 2% and 4%, or the full CPI increase if it is under 2%. Until the fund reaches 100% funded, the COLA is cut by 10% or 20% (5% or 10% once funding is over 90%). The smaller cut goes to retirees with 25+ years at or below the median benefit. The fund was 67.8% funded at June 30, 2025.Member Handbook 2025, pp. 21-22; 2026 COLA letter (Jan. 19, 2026), pp. 1-2
Your first COLA
Your COLA age depends on your tier, which is set by the date your membership began (see which tier am I in?).
- Tiers 1 and 2: July 1 of the year you reach 65, or July 1 of the year after your effective retirement date, whichever is later.
- Tiers 3 and 4: July 1 of the year you reach 67, or July 1 of the year after your effective retirement date, whichever is later.
Member Handbook 2025, p. 21, Cost of Living Adjustment; NMERB web page Cost of Living Adjustment (updated May 29, 2026)
For members retiring on July 1, 2026:
| Tier | Age at retirement | First COLA |
|---|---|---|
| Tier 1COLA age 65 | 58 | July 1, 2033 |
| Tier 2COLA age 65 | 66 | July 1, 2027 |
| Tier 3COLA age 67 | 60 | July 1, 2033 |
| Tier 4COLA age 67 | 62 | July 1, 2031 |
Disability benefits (and retirees certified disabled at retirement): July 1 of the third full year after the year approved; a disability recipient who turns 60 keeps the COLA at the same rate. Member Handbook 2025, p. 22; NMSA 1978, §22-11-31(G) as amended by SB 75 (2025); 2026 COLA letter, p. 1
NMSA §22-11-31(B), even as amended by SB 75 (2025), sets the age-67 COLA start only for members retiring under §22-11-23.2 (Tier 3); it does not name §22-11-23.3 (Tier 4). The handbook, the COLA web page and the actuary's 2026 letter all say age 67 applies to everyone who joined on or after July 1, 2013 (Tiers 3 and 4). Our calculator follows the handbook.
NMSA 1978, §22-11-31(B) (SB 75, 2025); Member Handbook 2025, p. 21; 2026 COLA letter, p. 1
The 2026 COLA
| Retiree | COLA |
|---|---|
| 25 or more years of service, benefit at or below $1,834.85 a monthCompare to the benefit the retiree received as of June 30, 2025, before the July 1, 2025 COLA. | 1.8%our engine: 1.8% |
| Everyone else | 1.6%our engine: 1.6% |
| Disability retirees | 2% |
Inflation (CPI) rose 2.698%; half of that is under the 2% floor, so the base was 2%. The fund was 67.8% funded, so the base was scaled down. Members who retired in 2026 don't get the July 1, 2026 COLA. 2026 COLA and Anti-Spiking Threshold letter (Jan. 19, 2026), pp. 2-3; NMERB web page Cost of Living Adjustment (updated May 29, 2026)
How the formula works
If the CPI increase is under 2%, the COLA equals the CPI increase. If 2% or more, the COLA is half the CPI increase, but not over 4% or under 2%. No COLA, and no decrease, when CPI falls. Member Handbook 2025, p. 21, Cost of Living Adjustment
Until the fund is fully funded, the result is multiplied by a factor. Retirees with 25 or more years of service credit at retirement and annuity at or below the median adjusted annuity get a bigger share. Member Handbook 2025, pp. 21-22; NMSA 1978, §22-11-31(C)(2)-(3)
| Funded ratio | 25+ yrs, at/below median | Others |
|---|---|---|
| 90% or less | × 0.91.8% at 2% CPI | × 0.81.6% at 2% CPI |
| over 90% and under 100% | × 0.951.9% at 2% CPI | × 0.91.8% at 2% CPI |
| 100% or more | × 12% at 2% CPI | × 12% at 2% CPI |
The handbook's examples at a 2% CPI rise. Our engine gives the same: 1.8% / 1.6%, 1.9% / 1.8%, 2% / 2%. Member Handbook 2025, pp. 21-22, examples based on a 2% annual increase in the CPI
Future COLAs depend on each year's inflation, the fund's funded ratio and the median benefit. Where we project COLAs we assume this year's rates stay the same, which won't be exactly right.
What would settle it: Each year's NMERB COLA letter.
COLA history
| July 1 | 25+ yrs, at/below median | Others | Median |
|---|---|---|---|
| 2026disability 2% | 1.8% | 1.6% | $1,834.85 |
| 2025disability 2% | 1.8% | 1.6% | $1,798.02 |
| 2024disability 2.1% | 1.89% | 1.68% | $1,746.63 |
| 2023disability 4% | 3.6% | 3.2% | $1,720.56 |
| 2022disability 2.3% | 2.07% | 1.84% | $1,703.84 |
| 2021disability 1.2% | 1.08% | 0.96% | $1,677.19 |
| 2020disability 1.8% | 1.62% | 1.44% | $1,653.20 |
| 2019disability 2% | 1.8% | 1.6% | $1,627.76 |
| 2018disability 2% | 1.8% | 1.6% | $1,611.45 |
| 2017disability 1.3% | 1.17% | 1.04% | $1,605.46 |
| 2016disability 0.1% | 0.09% | 0.08% | $1,586.22 |
| 2015disability 1.6% | 1.44% | 1.28% | $1,566.22 |
| 2014disability 1.5% | 1.35% | 1.2% | $1,543.06 |
| 2013disability 2% | 1.8% | 1.6% | $1,504.20 |
Before 2013 one rate applied to all: 2012 2.0, 2011 1.6, 2010 0.0, 2009-2004 2.0, 2003 1.6, 2002-2000 2.0, 1999 1.6, 1998-1993 2.0, 1992 2.1, 1991 2.7, 1990 2.4. 2026 COLA letter (Jan. 19, 2026), p. 5, NMERB COLA History Since 1990
Related: a COLA raises the benefit you start with, so one more year of service still matters, and Options B and C pass a share to a survivor (see payment options).
The anti-spiking limit
NMERB's actuary sets the anti-spiking limit in the same yearly letter. Applies only when the FAS is greater than the threshold ($60,000 as of July 1, 2019, indexed to CPI each July 1) and only to the parts of the FAS earned after July 1, 2019. A year-to-year salary increase above 30% is ignored in the FAS. Member Handbook 2025, p. 16, Anti-spiking
| From | Limit |
|---|---|
| July 1, 2019 | $60,000 |
| July 1, 2025 | $74,953 |
| July 1, 2026 | $76,975 |
2026 COLA and Anti-Spiking Threshold letter (Jan. 19, 2026), p. 3 The calculator shows your first COLA date. See the formula for how the limit affects your average.
Questions
When do NMERB retirees get their first COLA?
Tiers 1 and 2: july 1 of the year you reach 65, or July 1 of the year after your effective retirement date, whichever is later. Tiers 3 and 4: july 1 of the year you reach 67, or July 1 of the year after your effective retirement date, whichever is later.
What is the 2026 NMERB COLA?
1.8% for retirees with 25 or more years of service whose benefit is at or below the median of $1,834.85 a month, and 1.6% for everyone else (2% for disability retirees), from July 1, 2026. The fund was 67.8% funded.
How is the COLA worked out?
If the CPI increase is under 2%, the COLA equals the CPI increase. If 2% or more, the COLA is half the CPI increase, but not over 4% or under 2%. No COLA, and no decrease, when CPI falls. Until the fund is fully funded the result is scaled down, by less for long-service retirees with smaller benefits.
Source: NMERB Member Handbook, 2025 edition, pp. 16, 21, 21-22, 22. Also: NMERB web page 'Cost of Living Adjustment'; NMERB 2026 COLA and Anti-Spiking Threshold letter pp. 1, 1-2, 2-3, 2, 3, 5; NMSA 1978 § 22-11-31. Last reviewed .