Federal retirees will receive a cost-of-living adjustment of 2.8 percent in their benefits next year, the largest increase in more than a decade.
The boost—which applies more broadly to recipients of Social Security benefits—comes on top of a 2 percent boost in 2018. That increase came after a couple of years of very low percentage COLAs. The 2017 increase was only 0.3 percent.
The annual COLA is based on the percentage increase in the average Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the third quarter of the current year over the average CPI-W for the third quarter of the last year in which a COLA became effective.
The 2.8 percent increase applies to retirees under the Civil Service Retirement System. Those under the Federal Employees Retirement System will receive 2 percent. FERS employees only receive the full percentage increase if it is less than 2 percent. If the change is 2 percent to 3 percent, FERS retirees get 2 percent. And if the increase is 3 percent or higher, FERS retirees receive 1 percentage point less than the full increase.
“CSRS retirees and Social Security recipients will be pleased to see their benefits increase by 2.8 percent in 2019, the largest increase since 2012,” said Richard Thissen, president of the National Active and Retired Federal Employees Association. “Unfortunately, hundreds of thousands of FERS retirees will be wondering why they are only receiving a 2 percent COLA when the relevant measure of consumer prices increased by 2.8 percent.”
“It is past time for Congress to ensure FERS retirees receive a full COLA each year,” Thissen added.
Tony Reardon, president of the National Treasury Employees Union, said, "As retired federal employees welcome the increase in their monthly pensions in 2019, it’s a good time to remind them and all future retirees that such routine cost-of-living adjustments cannot be taken for granted. The administration has not given up its plan to eliminate COLAs for federal employees who retire through the Federal Employee Retirement System, and severely cut them for those in the Civil Service Retirement System."
The new COLAs will take effect starting with federal retirees’ December 2018 benefits.
Amelia Gruber contributed to this report.