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Federal retirees to receive 2012 COLA

Retirees will get a cost-of-living adjustment next year.

Retirees will get a cost-of-living adjustment next year. Civil Service Retirement System retirees will receive a COLA of 3.6 percent—the same as the Social Security COLA. Eligible Federal Employees Retirement System retirees will receive a COLA of 2.6 percent.

The COLA increases are based on the rise—if any—in the average Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, for July, August and September.

This year, the average for those months rose 3.6 percent above the last CPI-W measurement high enough to generate a COLA—the July to August 2008 average that generated a COLA for 2009. For the last two years, there have been no COLAs due to the declining prices of the consumer goods that make up the index.

Under current law, CSRS retirees receive the full amount of the CPI-W increase as a COLA. According to the rules for setting FERS COLAs, if the CPI-W index is above 3 percent, eligible FERS retirees receive a COLA that is 1 percentage point less.

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