Most government retirees will get a 2.7 percent increase in their monthly checks next year, their largest cost-of-living adjustment since 2001.
The COLA will go to retirees covered by the Civil Service Retirement System and those who receive military and Foreign Service annuities.
People who retired under the newer Federal Employees Retirement System and who are 62 or older will receive a 2 percent increase, under the rules for that program.
The COLA for this year should help most federal retirees cope with rising costs, although lower-income retirees could see much of their increase eaten up by higher health care costs.
Premiums next year are scheduled to rise 7.9 percent in the Federal Employees Health Benefits Program and Medicare premiums for doctor visits will jump 17.5 percent, the largest increase for that program in 15 years.
According to the Office of Personnel Management, the average CSRS annuity is $2,196 a month, and will rise by $59 next year. The average FERS annuity is $795, which, with the 2 percent COLA, will go up by $16 a month in 2005.
The increases in monthly checks should ensure that the typical CSRS retiree can cover higher health care premiums. For 2005, the Medicare Part B premium is rising by $11.60, and a federal retiree enrolled in the Blue Cross Blue Shield standard option plan will pay an extra $3.92 monthly for individual coverage and an additional $11.21 monthly for family coverage.
As of Oct. 1, OPM counted more than 2.1 million CSRS retirees and spouses of deceased retirees and 211,000 FERS retirees and survivors. Congress created FERS in 1984 as part of its decision to make Social Security a part of federal employment and to offer a 401(k)-type savings program to federal government workers.
About 321,000 federal retirees and spouses of deceased retirees live in the District, Virginia and Maryland.
The latest Defense Department count shows about 1.88 million military retirees across the nation, with about 167,000 of them living in the District, Maryland and Virginia.
Federal retiree COLAs are linked to the annual adjustment in Social Security benefits, which are going up by 2.7 percent -- or an additional $25, on average -- next year. The estimated monthly Social Security benefit for an individual will rise from $896 to $920. For a retired couple, with both receiving benefits, the estimated monthly payment will increase from $1,532 to $1,574, the Social Security Administration said.
COLAs are based on the rise in the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers, known as the CPI-W. Numerous retirees believe the index does not capture the rising costs they face for medical care, gasoline and food.
Still, the COLA is one of the largest in recent years. This year, CSRS retirees received a 2.1 percent COLA. Their last jumbo COLA came in 2001, when inflation led to a 3.5 percent increase.
FERS retirees, who receive a civil service annuity as an adjunct to their Social Security, have received COLAs of 2 percent or less in recent years and 2.5 percent in 2001.
As of Oct. 1, OPM said, the median CSRS annuity was $1,938 a month and the median CSRS survivor pension was $962.
The median FERS annuity was $530 a month, and the survivor pension was $255, OPM said.
As of Sept. 30, 2003, the median monthly annuity for military retirees was $1,404. For military retirees in the District, Virginia and Maryland, the median pension was slightly higher -- $1,627 a month.
Richard N. Brown has been reelected president of the National Federation of Federal Employees, the union announced.
Brown, who defeated Sandra Bond, will serve a third four-year term. The election took place at NFFE's national convention last week in Las Vegas.
NARFE on Diary Live
Dan Adcock and Ken Glass of the National Association of Retired Federal Employees will take questions and comments at noon today on Federal Diary Live at www.washingtonpost.com. Adcock is the association's assistant director of legislation and Glass is NARFE's director of retirement benefits. Please join us.