Federal civilian retirees are set to receive a 1.7 percent cost-of-living adjustment (COLA) in 2015.  Retirees covered under the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS) will see the increase reflected in their January 2015 payment.

The increase is slightly higher than the 1.5 percent COLA federal retirees received in 2014.  The 2013 COLA was also 1.7 percent and the 2012 COLA was much higher at 3.6 percent. No adjustment 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 1.7 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 2015. Congress passed and the president signed a FY2015 Continuing Resolution that runs until December 11, 2014, which did not address the federal civilian pay raise. By remaining silent on the pay raise, Congress appears to support the president’s proposed 1 percent pay increase in January. If Congress takes no further action on the pay raise when it completes the FY2015 appropriations bills, the president can issue an executive order implementing the raise.