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Federal retirees in the Civil Service Retirement System will receive a 3.3 percent larger pension check in 2007.

The government unveiled next year's cost-of-living allowance Wednesday. It is based on the change in the Labor Department's Consumer Price Index for urban wage earners from the third quarter of one year to the same quarter of the next.

The 3.3 percent boost is smaller than the 4.1 percent increase for 2006, which was the highest since 1991. But the 2007 rate still is bigger than the several years before 2006. In 2005, the increase was 2.7 percent. In 2004, it was 2.1 percent; in 2003, 1.4 percent and in 2002, 2.6 percent.

The COLA will not be the same for retirees in the newer Federal Employees Retirement System. If the change in the CPI is more than 3 percent, FERS retirees get the COLA minus 1 percent. So FERS members will get a 2.3 percent adjustment next year.

FERS is more dependent on government matching contributions to the Thrift Savings Plan, a 401(k)-style retirement investment vehicle for federal employees. As a result, FERS retirees sometimes get smaller COLAs, and they only receive the cost-of-living allowance if they are 62 or older.

CSRS annuitants must have been retired one full year to receive the full COLA. If they do not meet that threshold, they will receive prorated annuities, encompassing one-twelfth of the applicable increase for each month they've received their pension.

Federal retirees will receive their first checks reflecting the increase in January 2007.

Current employees in the civil service will get a different annual increase altogether - - a pay hike determined by Congress and approved by the president. Lawmakers still are debating between a 2.2 percent raise, which they already approved for the military, and a 2.7 percent raise, which they included in initial drafts of legislation for civilians.

If civilians get a 2.2 percent raise, the Federal Salary Council recommended it be allocated between a 1.7 percent across-the-board boost and a 0.5 percent locality hike. With a 2.7 percent raise, the breakdown would be 1.7 percent and 1 percent.

COMMENTS

• Okay, last shot and I’m off my soapbox. I volunteered during the draft, (please don’t calculate how long ago that was) and I understand about soldiers not getting paid much; but let’s look at our current recruitment picture. Patriotism is what got many soldiers in after 9/11. Now they are leaving thinking, rightfully, that they did their share; many because they can do better on the “outside.” Maintaining a professional Army means getting people to stay; those benefits or “freebies” are part of a comprehensive package, the entirety of which keeps soldiers in the service. Perhaps troops are unhappy. Additionally, soldiers being forced to relocate their families every two to three years don’t have the same opportunities to grow equity as more sedentary civilians. The costs are higher and more frequent. But “Senior Inspector” is right; they volunteered just like I did. That is a different issue than getting them in the service in the first place; and that is what I should have expressed initially. The monetary draw is, evidently, insufficient to recruit new troops; and most experts agree, we need 40 to 60 thousand more at a minimum. I feel we can solve our short term problems of retention and recruitment, but we’ll have to have something on the plate to attract the young people. High school graduates do not understand the entire benefits package the military offers, and most new recruits do not receive all those benefits like BAH and BAQ. I just think that we, as a nation, are failing to grasp the trepidation most young folks are looking at the military situation with. I think that bonuses (there’s those freebies again) can help both retention and recruitment; but they are selective and they do not incur lasting debt by raising the retirement cost. As for comparing stateside duties, military to civilians, I’ve seen E-5s and E-6s doing the same work of a GS-11 so I don’t really think we’re relatively under compensated. Perhaps we’ll agree to disagree, but just wait. Something’s going to have to be done in the next two years, so the wait won’t be long. Don’t blink. Tip off. GovExec.com reader Posted November 17, 2006 1:01 PM
• Sounds like there are unhappy troops out there? Well, as another poster said, there's no draft, so joining the military is similar to joining a company. The only people who deserve a large increase are those in frontline units, combat or sea duty. Most of the support jobs are similar to civilian jobs, and entail no risk. Historically, the military has never paid well in any nation. If a person wants to serve his/her country, fine. But they would do much better financially in private industry. I stand by my previous point -- many of the benefits given to all military personnel (including dependents) are free. Those of us who worked in the civilian part of the government received no such extras. GovExec.com reader Posted November 3, 2006 3:36 PM
• I agree with you Tip, I had to read some of the comments twice -- hard to believe. I guess ignorance really is bliss. Rick Posted November 3, 2006 2:50 AM