President Trump has formally frozen federal civilian pay for 2027, transmitting his alternative pay plan letter to Congress on August 26. The letter proposes holding both base pay and locality pay at 2026 rates for most federal employees, while authorizing a 3.8% increase for law enforcement personnel and raises of 5% to 7% for military members, depending on rank.
Congress can still override the freeze, but has not done so in similar years past, and the alternative pay plan typically becomes final when OPM issues the official 2027 pay tables in December. If it stands, 2027 would be the smallest civilian pay adjustment since the freeze years of the early 2010s.
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What the Letter Proposes
The letter cites(opens in new tab) the Federal Employees Pay Comparability Act (FEPCA), which requires the president to submit an alternative pay plan each year by August 31 or allow a statutory formula to take effect automatically. According to the letter, that formula would have triggered locality pay increases averaging 20.6% at a cost of $26 billion in the first year, on top of a 3.1% across-the-board base pay increase. The administration says freezing pay avoids that cost.
- Base pay and locality pay: frozen at 2026 rates for most civilian employees
- Law enforcement personnel: 3.8% increase, implemented separately through OPM’s special rate authority
- Military (E-1 to E-5): 7.0% increase
- Military (E-6 to O-3): 6.0% increase
- Military (O-4 and above): 5.0% increase
- Other uniformed service members: 3.6% increase
OPM has not yet said which categories of law enforcement personnel will qualify for the 3.8% increase; that determination is expected to follow the same process used for the 2026 raise.
The Pay Freeze Is Not the COLA
These two figures get confused every year, and this year is no different. The federal pay raise applies only to current employees and is set through the political process described above. The COLA applies to retirees and is calculated automatically from the Consumer Price Index, with no input from the president or Congress. The 2027 COLA will be announced in October once third-quarter CPI-W data are final, with early estimates pointing to a range of roughly 3.5% to 3.7%.
What a Frozen Year Means If You’re Close to Retirement
If you’re within a few years of retiring, a frozen salary year does more than just hold your paycheck flat. It also affects your High-3 salary average, since that figure is built from your highest 36 consecutive months of basic pay. A year with no raise pulls that average down slightly compared to a year where pay kept rising, and the effect compounds if your final year of service happens to fall during the freeze.
Here’s a simplified illustration. Assume a FERS employee earning $114,000, with 2% annual raises in a normal year, compared to the same employee whose final year is frozen at 0%.
| Scenario | Year 1 | Year 2 | Year 3 | High-3 Average |
|---|---|---|---|---|
| Normal raises each year (2%) | $114,000 | $116,280 | $118,606 | $116,295 |
| Final year frozen (0%) | $114,000 | $116,280 | $116,280 | $115,520 |
In this example, the frozen year lowers the High-3 average by about $775. Multiplied by your years of service and pension multiplier, that’s a modest but real reduction to your annuity for the rest of your retirement. It’s not large enough to change most people’s retirement plans on its own, but it’s worth factoring in if you’re deciding between retiring at year-end versus waiting for a possible raise, or if you’re already running the numbers on when to file.
What Still Moves Even in a Freeze Year
A frozen across-the-board and locality rate doesn’t mean your paycheck is completely stuck. Within-grade step increases still apply on their normal schedule if you’re not already at the top step, and any promotion or locality area change still raises your pay. Those factors can offset some or all of the freeze’s effect on your High-3, depending on where you are in your career.
What Happens Next
Congress has until the alternative pay plan takes effect to pass legislation setting a different number, most likely through the FAIR Act, which would provide a 4.1% raise. That bill has been introduced every year since 2014 and has never passed. Barring a change, OPM will issue the final 2027 pay tables in December, and the freeze outlined in this letter will take effect on the first pay period of January 2027.
Want to know the moment the 2027 federal pay raise (or freeze) is determined?
Enter your email on this form [CLICK HERE] (opens in new tab)and we’ll send you an email alert as soon as the 2027 pay raise (or freeze) is finalized — plus what it means for your specific grade and step.
Official Sources: House Document 119-189, “Alternative Plan for Pay Adjustments,” transmitted to Congress August 26, 2026(opens in new tab)