Because of a drop in the inflation rate, the 3.9 percent cost-of-living adjustment (COLA) due to most government retirees in May will be their smallest in more than a decade.
The adjustment will show up in annuity checks received in May for most of the 150,000 civil service and military retirees living in the Washington and Baltimore areas.
Worldwide, retired civil servants and military personnel from Denver to Dublin also will get the adjustment, which in previous years often has been double or triple this year's amount.
The COLA represents the adjusted increase in the Consumer Price Index from December 1981 to December 1982. Retirees had been expecting a 4.3 percent increase, based on the November CPI, but the inflation index dropped, primarily because of lower energy costs and declining mortage rates.
The CPI is the official measurement of the rate of inflation, and federal-military pensions are indexed to it.
Because of a change that Congress made last year, retirees who have not reached their 62nd birthday by March 1 will get an increase of3.3 percent.
Congress originally intended to hold the younger (under 62) retirees to half the COLA each of the next three years. But since it estimated that the 1983 raise would be at least 6.6 percent, it included language guaranteeing younger retirees at least half of the projected amount. Because the inflation rate is much lower than Congress anticipated, however, the younger retirees will get about 85 percent of the actual COLA payout, rather than the50 percent Congress had intended.
Last year, retirees got an 8.7 percent COLA and in 1981 they received 4.4 percent.
In 1980, back when retirees got adjustments every six months and the inflation rate was much higher, retirees received a 6 percent adjustment in March and an additional7.7 percent in September. The year before, they had received two COLAs: one for 3.9 percent and one for 6.9 percent.
Administration officials say that the adjustment will be paid on schedule this year.
The White House is planning to ask Congress to defer for six months all future increases for persons getting Social Security, civil service and military retirement benefits. But that change, even if approved by Congress, will not affect the upcoming federal-military retirement increase.