crs_reports: 94-834

Congressional Research Service reports with summaries, authors, and topic classifications.

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id title publish_date update_date status content_type authors topics summary pdf_url html_url
94-834 Cost-of-Living Adjustments for Federal Civil Service Annuities 2025-11-13T05:00:00Z 2025-11-15T08:37:48Z Active Reports Katelin P. Isaacs Federal Workforce Management, Pensions & IRAs Cost-of-living adjustments (COLAs) for the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS) are based on the rate of inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). COLAs for both CSRS and FERS are determined by the change in the average monthly CPI-W during the third quarter (July to September) of the current calendar year and the third quarter of the base year, which is the last previous year in which a COLA was applied. The “effective date” for COLAs is December, but they first appear in the benefits issued during the following January. All CSRS retirees and survivors receive COLAs. Under FERS, however, nondisabled retirees under the age of 62 do not receive COLAs. Survivors and disabled retirees are eligible for COLAs under FERS regardless of age. CSRS pays a COLA that is equal to the percentage change in the CPI-W during the measurement period, but COLAs under FERS are limited if the rate of inflation is greater than 2.0%. If the rate of inflation during the measurement period is between 2.0% and 3.0%, the COLA under FERS is 2.0%. If inflation is greater than 3.0%, then the COLA for FERS benefits is equal to the CPI-W minus one percentage point. (For background on the legislative rationale for the FERS COLA as well as examples of legislation to make the FERS COLA calculation the same as the CSRS COLA calculation, see CRS In Focus IF12354, The FERS Cost-of-Living-Adjustment (COLA) and the Equal COLA Act (H.R. 491 and S. 624). Congress passed the first law requiring automatic COLAs for federal civil service retirement benefits in 1962, and it has adjusted either the formula by which they are calculated or the date on which they take effect more than 10 times since then. If consumer prices as measured by the CPI-W do not increase from the third quarter of the base year to the third quarter of the current calendar year, there is no COLA for annuities paid under CSRS or FERS. For example, from the third quarter of 2014 to the third quarter of 2015, the CPI-W fell by 0.4%. Therefore, no COLA was paid under either CSRS or FERS beginning January 2016. From the third quarter of 2024 to the third quarter of 2025, the CPI-W increased by 2.8%. Therefore, beginning in January 2026, the CSRS COLA is 2.8% and the FERS COLA is 2.0%. https://www.congress.gov/crs_external_products/RS/PDF/94-834/94-834.34.pdf https://www.congress.gov/crs_external_products/RS/HTML/94-834.html

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