One of the joys of being a federal retiree — other than the obvious one of being retired — is that you get an annual a cost-of-living adjustment to your annuity. If you are a CSRS retiree and have been retired for at least one year, your January 2009 annuity payment will be increased by 5.8 percent; if you are a FERS retiree, it will be 4.8 percent. I’ll explain why FERS retirees get less a little later.

If you have been retired for less than one year, your COLA will be proportionately less. The following formula will help you figure out how much your COLA will be:

(COLA rate over 12) X (Number of months on annuity roll) = Prorated COLA

So, for example, if you are a CSRS retiree who has been on the annuity roll for six months, your COLA would be 2.9 percent (5.8 ÷ 12 = 0.483 percent x 6 = 2.9 percent (2.89 rounded to the nearest 1/10th of 1 percent). Under FERS it would be 2.4 percent.

The following chart will help you to find out how long you’ve been on the annuity roll:

If your monthly annuity begins during:

————————————–

December of previous year then Number of months on the roll is 12

January then Number of months on the roll is 11

February then Number of months on the roll is 10

March then Number of months on the roll is 9

April then Number of months on the roll is 8

May then Number of months on the roll is 7

June then Number of months on the roll is 6

July then Number of months on the roll is 5

August then Number of months on the roll is 4

September then Number of months on the roll is 3

October then Number of months on the roll is 2

November then Number of months on the roll is 1

No, I didn’t forget. You want to know why FERS retirees are getting a smaller COLA. Here’s why. When Congress established the Federal Employees Retirement System, it decided that if the annual change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI/W) increases up to 2 percent, the FERS COLA will be increased by the full amount. Between 2 and 3 percent, it will increased by 2 percent. When it’s 3 percent or more, it will be the CPI/W minus 1 percent. No explanation as to why. It just is.

CSRS COLAs are payable no matter the age at which you retire. The same is true for the COLAs given to CSRS survivors, disability retirees, and special category employees, such as law enforcement officers and firefighters. On the other hand, FERS COLAs begin at age 62 for everyone other than FERS special category employees, disability retirees, and survivors.