It really was a jumbo COLA.
Federal retirees covered by the Civil Service Retirement System and people who receive military and Foreign Service annuities will receive a 4.1 percent cost-of-living adjustment in their January checks.
People who retired under the newer Federal Employees Retirement System and who are 62 or older will receive a 3.1 percent increase, under the rules for that program.
The COLA is the biggest increase in 15 years and was driven by soaring energy costs, especially in September after hurricanes roared across Gulf Coast states.
When the COLA kicks in, the average CSRS benefit will rise by about $94 a month and the average FERS benefit by about $26 per month.
For numerous retirees, the COLA will help offset rising prices and increasing health care costs facing federal retirees. The monthly Medicare premium for doctor's visits and other services will go up by $10.30 a month in 2006. Premiums in one of the most popular health insurance plans, Blue Cross and Blue Shield's standard option, are going up by $15.95 a month for individuals and $37.99 monthly for a family.
Charles L. Fallis, president of the National Active and Retired Federal Employees Association, called the 2006 COLA "the best we've had in years, but I say that I doubt very much that it keeps up with the cost of living. I have mixed feelings about it."
Fallis said the size of the adjustment could draw the attention of members of Congress, such as conservative House Republicans, who are looking for ways to reduce spending on entitlements. Federal pensions, Fallis said, "will be another target for them."
This year, CSRS retirees received a 2.7 percent increase in their monthly checks, and FERS retirees received a 2 percent increase. Except for 2001, adjustments for CSRS retirees have been at rates less than 3 percent.
As of Oct. 1, the Office of Personnel Management counted more than 2.4 million federal retirees. More than 327,000 retirees and spouses of deceased retirees live in the District, Maryland and Virginia.
Currently, the average CSRS annuity is $2,302 monthly, and the average FERS annuity is $842, OPM said. The average CSRS benefit going to a survivor is $1,247 monthly, and the average FERS survivor benefit is $391 per month.
The latest Defense Department count shows about 1.9 million military retirees across the nation. More than 174,400 live in the District, Maryland and Virginia, the Pentagon said.
As of Sept. 30, 2004, the most recent data available, the typical military retiree in the region drew about $2,080 in monthly retirement pay.
The State Department has 11,494 Foreign Service retirees, who receive annuities that average about $4,210 monthly.
Retirees and Part D
Several Diary readers have asked whether they need to enroll in the Medicare drug prescription program. The answer is: No.
Nancy H. Kichak, a senior official at the Office of Personnel Management in charge of federal employee health insurance policy, said federal retirees should not sign up for Medicare Part D, the prescription drug benefit. She said the Federal Employees Health Benefits Program provides a drug benefit that is more generous than the standard Medicare drug benefit.
In other words, there is little point to paying twice for the same benefit.
Still, many federal employees provide care for their parents and other elders in their families, and they might want to go to www.medicare.gov and read about the program's new drug coverage.
Medicare enrollees may sign up for Part D drug coverage Nov. 15 through May 15. Medicare-eligible people who do not enroll in a prescription drug plan and who do not have coverage equal to the Medicare plan will pay a higher premium if they enroll later than May 15.
That higher premium would not apply to anyone enrolled in FEHBP who later decided to take the Medicare drug option, Kichak said.
Please join me for a discussion of federal employee and retiree issues at noon Wednesday on Federal Diary Live at www.washingtonpost.com.