Federal Retirees Are Set to Receive the Highest COLA in Decades, But Some Will Get Less Than Others
Civil Service Retirement System enrollees will see an 8.7% increase in their defined benefit pension payments in 2023, while participants in the Federal Employees Retirement System will only receive a 7.7% increase.
For the second year in a row, federal retirees will see the largest annual increase in benefits payments in decades, as the Social Security Administration announced Thursday that the annual Social Security cost-of-living adjustment for 2023 will be 8.7%. Not all federal retirees will get the full 8.7%, however, prompting renewed calls for parity between the federal government’s retirement systems.
Social Security cost-of-living increases are calculated based on the annual change in the third quarter consumer price index for workers. The Civil Service Retirement System also calculates enrollees’ annual annuity increases on that basis, meaning retirees enrolled in CSRS will see an 8.7% increase to their annuity payments in 2023, the largest COLA since 1981.
Last year, Social Security and CSRS annuitants received a 5.9% cost of living adjustment, which marked the largest increase since 1982.
But former federal workers who are enrolled in the newer Federal Employees Retirement System, which came into being along with the 401(k)-style Thrift Savings Plan, will only receive a 7.7% increase in their annuities.