CSRS retirees to get 3.3 percent pension bump

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.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care


When you download a report, your information may be shared with the underwriters of that document.