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When they return to the State House, lawmakers face a dilemma on what to do about state pension benefits.

Current law provides an annual cost-of-living adjustment to the monthly state retirement benefit, based on the previous year's Consumer Price Index. According to the U.S. Bureau of Labor Statistics, the CPI has fallen 0.2 percent for the 12 months ending in October.

If current law remains unchanged, and the downward trend continues, those monthly checks would fall with the CPI, starting in July.

"I do think because of the fiscal situation that we're in, there will be no COLA. But I don't feel comfortable with it being reduced to track with the CPI," said Del. Susan L.M. Aumann (R-Dist. 42) of Timonium. Aumann is a member of the General Assembly's Special Joint Committee on Pensions, which discussed the potential pension cut Tuesday.

"I don't believe it would be worthwhile," said Sen. Rona E. Kramer (D-Dist. 14) of Olney, who is also a pension committee member.

Del. Melony G. Griffith, the House chairwoman of the committee, said she was sure that once lawmakers return to Annapolis, they will provide a solution through legislation.

"It might say we do nothing. It might say we zero it out so they're held harmless. I don't want to speculate what the final legislation would look like," said Griffith (D-Dist. 25) of Upper Marlboro.

State pension funds have $31.5 billion in assets as of October, said R. Dean Kenderdine, executive director of Maryland State Retirement Agency. The funds have been increasing. Total assets were $26.6 billion in November 2008 and $28.5 billion in June, he said.

The state plan has 116,000 retirees and 250,000 others who contribute to it, including state and county employees, teachers and police officers.

Patrick Moran, director of the American Federation of State County and Municipal Employees, said that given the current economy, it would be "puzzling and absurd" for the state to even consider cutting benefits to retirees.

"We are at least asking for the status quo because a reduction in payments would be catastrophic to seniors and the economy as a whole," Moran said.

Even if the cut in pension benefits stands, it would have little effect on the state's bottom line, Kenderdine said.

The state budget will include a $189 million contribution to the fund for fiscal 2011, he said.