Federal retirees will receive a 2009 COLA increase of up to 5.8%, based on the

increase in the Consumer Price Index from the third quarter of 2007 through

the third quarter of 2008.

Federal retirees covered by CSRS will receive the full 5.8 percent

increase to their annuity checks in 2009, which is the href="http://www.myfederalretirement.com/public/189.cfm">largest increase

since 1982.   FERS retirees will get a 4.8 percent

increase next year. FERS retirees also receive Social Security benefits,

which are adjusted by the full 5.8 percent change in the

CPI. 

How is the Cost-of-Living Adjustment (COLA) determined?

The U.S. Department of Labor calculates the change in the Consumer Price

Index (CPI) for urban wage earners and clerical workers from the third quarter

average of the previous year to the third quarter average for the current year.

For Civil Service Retirement System (CSRS) or Organization and Disability

Retirement System (ORDS) benefits, the increase percentage is applied to your

monthly benefit amount before any deductions, and is rounded down to the next

whole dollar.

For Federal Employees Retirement System (FERS) or FERS Special benefits, if

the increase in the CPI is 2 percent or less, the Cost-of-Living Adjustment

(COLA) is equal to the CPI increase. If the CPI increase is more than 2 percent

but no more than 3 percent, the Cost-of-Living Adjustment is 2 percent. If the

CPI increase is more than 3 percent, the adjustment is 1 percent less than the

CPI increase. The new amount is rounded down to the next whole dollar.

To get the full COLA, a retiree or survivor annuitant must have been

in receipt of payment for a full year. If not, the increase is prorated under

both plans. Prorated accounts receive one-twelfth of the increase for

each month they received benefits. Cost-of-Living Adjustments were first

prorated in April 1982. Adjustments to benefits for children are never

prorated. 

Please see the following tables:  

• FERS COLA

  Proration Table

• CSRS COLA

  Proration Table

Federal Employees Retirement System (FERS) and FERS Special Cost-of-Living

Adjustments are not provided until age 62, except for disability, survivor

benefits, and other special provision retirements. FERS disability retirees get

the adjustment, except when they are receiving a disability annuity based on 60

percent of their high-3 average salary. Also, under FERS, if you have a CSRS

component, the component is subject to the CSRS COLA calculation.

Note: A benefit will not be increased if it would cause the annuitant to

receive payments in excess of any cap amount specified by law.

When is the Cost-of-Living Adjustment (COLA) paid?

Cost-of-Living Adjustments are effective each December first. The adjustment

appears in your payment on the first business day of January, which is when your

benefit for December is paid. Federal Employees Retirement System (FERS) and

FERS Special Cost-of-Living Adjustments are not provided until age 62, except

for disability, survivor benefits, and other special provision retirements. FERS

disability retirees get the adjustment, except when they are receiving a

disability annuity based on 60 percent of their high-3 average salary. Also,

under FERS, if you have a CSRS component, the component is subject to the CSRS

COLA calculation.