Alexandria, Va. – In response to the final determination of 2026 cost-of-living adjustments (COLA) to federal retirement annuities and Social Security benefits, which will be 2.8% for Civil Service Retirement System (CSRS) annuities and Social Security benefits and 2.0% for Federal Employee Retirement System (FERS) annuities, NARFE National President William Shackelford issued the following statement:
“Cost-of-living adjustments provide a critical boost to the value of federal retirement benefits, ensuring they keep pace with rising prices.
“Yet, with inflation above 2%, FERS retirees will have their COLAs capped, reducing the real value of their annuities. Inflation impacts these FERS retirees the same way as all other retirees, yet they are forced to accept a diet COLA.
“The Equal COLA Act, H.R.491/S.624, would remedy this inequity, providing full COLAs to FERS retirees. NARFE continues to urge all members of Congress to support this bill. FERS retirees deserve full protection to maintain the purchasing power of their annuity throughout retirement.
“This COLA also does not adequately compensate for the sharp increase in the enrollee share of health insurance premiums affecting the federal community, which will rise by an average of 12.3% next year for federal annuitants, following a 13.5% increase for 2025. This comes on top of rising prices for many other goods and services.”
Background
- FERS COLAs are capped at 2% when consumer prices increase between 2% and 3%, and are reduced by 1 percentage point when consumer prices increase by 3% or more. This inequitable policy, enacted in the 1980s with the creation of FERS, fails to fully protect the earned value of FERS annuities.
- The COLA is calculated by comparing the change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) year to year, based on the average of the third-quarter months of July, August and September. For updates, visit www.narfe.org/cola.
