Civil service annuities, military retirement pay, Social Security and other pension benefits tied to living costs will go up about 3 percent in January.
In the Washington area, more than 100,000 former federal and military personnel will be getting the increase. Federal-military retirement benefits -- such as Social Security -- rise with the consumer price index that measures the inflation rate.
Each 1 percent jump in civil service retirement benefits costs $200 million a year. The price tag for the Social Security increases, which affect one in every six Americans, will be much, much bigger.
Federal workers -- who in January got the same raise as retirees -- will not share in the 1986 cost-of-living adjustment (COLA). The 1986 budget Congress has approved calls for no federal pay raise.
The percent of the COLA will not be determined until mid-October. That is when the government will have third-quarter (July, August, September) cost-of-living data. The increase that retirees will get will represent the rise in living costs in the third quarter this year over the same period in 1984. The raise goes into effect in December. It will be in January checks.
So far, based on July cost-of-living data, retirees are due a 2.9 percent raise. But that amount will go up if living costs (as expected) rise this month and in September.
Civil servants will skip any 1986 raise, even though government data indicates that they are due a 19 percent catch-up-with-industry raise. The Reagan administration said the Labor Department survey does not fairly compare government versus industry pay because it excludes firms that employ most Americans, nor does it take into account pay of state and local government workers.
President Reagan originally asked Congress to cut federal pay 5 percent next year, but he is expected to go along with the freeze. The Senate originally approved a COLA freeze for retirees but dropped that idea because of the outcry from the big Social Security lobby.
The only federal workers who will get pay raises next year are employes who come due for within-grade (longevity) increases, worth about 3 percent, and postal workers who are guaranteed raises by contract.