Federal civilian retirees are set to receive a 0.3 percent cost-of-living adjustment (COLA) in 2017. Retirees covered under the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS) will see the increase reflected in their January 2017 payment.
This small increase results from continuing low inflation throughout the year, primarily due to the decline in gasoline prices. The annual retiree COLA is calculated as the change in the average Consumer Price Index for Wage Earners and Clerical Workers (CPI-W)—published by the Bureau of Labor Statistics (BLS)—from the third quarter of the previous year to the third quarter of the current year.
This is the same calculation for the Social Security COLA. Social Security recipients will also receive a 0.3 COLA in 2017.
Federal retirees received no COLA in 2016. The COLA was 1.7 percent in 2015. 1.5 percent in 2014, 1,7 percent in 2013 and 3.6 percent in 2012. No adjustment was paid to retirees in 201 and 2010.
In late August President Obama notified Congress that federal civilian employees should receive a 1.6 percent pay raise in 2017. The 1.6 percent pay raise is a combination of a 1.0 percent across-the-board raise announced in the letter and an increase in locality pay the president said he will announce by November 30, 2016. If Congress takes no action on the pay raise when it completes the FY2017 appropriations bills, the president can issue an executive order implementing the raise.