2006 COLA Set at 4.1 Percent

Those retired under the CSRS retirement system, who make up the large majority of federal retirees, will get a 4.1 percent increase in their annuities, paid in their January payments, following the final compilation of the inflation index used to set those adjustments (the consumer price index used in setting the COLA rose 1.2 percent in September). The COLA also will apply to Social Security and military retirement benefits. Those retired under the FERS system and who are eligible for COLAs—in most cases, FERS doesn’t pay COLAs until age 62—will get 3.1 percent. Those who retired with mixed FERS-CSRS annuities will get 3.1 percent on the portion of the benefit attributable to FERS service and 4.1 percent on the CSRS portion. COLAs are prorated for those who have retired, or still will retire, this year. The increase is the largest since 1990.