Expert's View

December 31 was the last day that FERS employees could retire and be on the annuity roll in January. And January 3 was the last day that CSRS employees could do the same. So, if you didn’t jump ship then, you probably have visions of retirement still dancing in your head. If that’s the case, you’ll want to know what retiring later in the year would mean for you. Let me tell you.

Like most things in life – and even more so in the federal government – the rules aren’t obvious nor the path smooth. For example, you’d think that somebody who went on the annuity roll in January would be entitled to a full cost-of-living adjustment (COLA) next January. Not so. In order to get a full COLA, he would have had to retire no later than November 30 (FERS) or December 3 (CSRS). Therefore, all of those who bailed out at the end of the year will only receive 11/12ths of the 2018 COLA.


The following will help you to find out how long you’d be on the annuity roll and what part of the 2018 COLA you’d be entitled to.

If your monthly annuity begins during December of the previous year, your number of months on the roll is 12.
…and so on:
January: 11
February: 10
March: 9
April: 8
May: 7
June: 6
July: 5
August: 4
September: 3
October: 2
November: 1

When you retire, and thus what percentage of the 2018 COLA you would receive (assuming there is one), is within your control. The size of the underlying COLA is not.

That’s in the hands of the Bureau of Labor Statistics, which gathers detailed expenditure information provided by families and individuals about what they actually bought. BLS follows these consumption trends and bundles them into eight major groups: food and beverage; housing; apparel; transportation; medical care; recreation; education and communication; and other goods and services.

It also tracks government-charged user fees, for example, water and sewerage charges, auto registration fees, and vehicle tolls, plus sales and excise taxes. The end result is the CPI-W, the Consumer Price Index for Urban Wage Earners and Clerical Workers. The percentage change is published each October and is applied in January to both federal annuities and Social Security benefits.

Another variable is the way COLAs are applied to CSRS and FERS annuities. I wrote about that last week. As a quick review: When the COLA is 3 percent or higher, FERS retirees receive the COLA minus 1 percent. If it’s between 2 and 3 percent, FERS retirees only receive 2 percent. If it’s less than 2 percent, CSRS and FERS retirees receive the same amount. If the percentage drops below zero, there’s a hold-harmless provision in the law that keeps your annuity from being reduced. That’s what happened in 2010, 2011 and 2016 when retirees got zip.