Federal civilian retirees are set to receive a 1.5 percent cost-of-living adjustment (COLA) in 2014.  Retirees covered under the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS) will see the increase reflected in their January 2014 payment.

The increase is slightly lower than the 1.7 percent COLA federal retirees received in 2013.  The 2012 COLA was 3.6 percent, but no COLA was paid to retirees in 2010 and 2011. 

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 1.5 percent increase.

In early September, President Obama notified Congress that he determined that federal civilian employees should receive a 1 percent across-the-board pay raise in 2014. In the recent deal to reopen the government and avert a debt crisis, Congress passed and the president signed a FY2014 Continuing Resolution that runs until January 15, 2014. By remaining silent on the federal civilian pay raise, the bill clears the way for a 1 percent pay increase in January if the president issues an executive order implementing the raise and Congress take no further action.