Some policies differ between the two main federal retirement benefits programs, the Civil Service Retirement System for those first hired before 1984 and the Federal Employees Retirement System for those first hired in that year and after.
CSRS pays inflation adjustments to retirees at any age, while under FERS, cost-of-living adjustments aren’t payable until age 62, except for those who retired on disability or from occupations such as law enforcement that require earlier retirement.
While all but a few percent of current federal employees are under the FERS system, 62 percent of retirees are drawing benefits from the CSRS program. Of the 2.1 million total, about 138,000 are in Maryland, 120,000 in Virginia and 37,000 in the District.
California has the most (about 170,000), followed by Florida (151,000), Texas (143,000), Maryland and Virginia.
Although benefits under both systems are based on salary and length of service, the CSRS formula is more generous; as of last October, its average retiree’s monthly annuity was $3,781, compared to $1,506 under FERS.
The COLA boost also will apply to survivor beneficiaries under both CSRS and FERS, where the average monthly benefits were $1,646 and $596, respectively, as of last October.
FERS includes Social Security, plus employer contributions toward the 401(k)-style Thrift Savings Plan, to help make up for its less generous basic benefits formula. Some CSRS retirees do qualify for Social Security through other work, although those benefits commonly are subject to an offset that can decrease their value by hundreds of dollars a month.
The government announced last week that the enrollee share of premiums will increase by 5.6 percent on average in January in the Federal Employees Health Benefits Program (FEHBP) that covers most federal retirees as well as current employees.
In the largest plan, the Blue Cross and Blue Shield standard option, the monthly premium will increase by $40.14, to $621.27, for self-plus-one coverage, a common enrollment type for married retirees who have no children eligible for coverage. FEHBP enrollees may change plans in the annual open season that will run Nov. 11 to Dec. 9.
The COLA adjustment applies only to retirees. Raises for current employees are decided in the federal budget process, which still is ongoing for 2020.
President Trump recently supported a 2.6 percent across-the-board raise for federal employees in January 2020, reversing his earlier call for a freeze. A Senate committee then effectively endorsed that figure by taking no position. The House has voted for an average 3.1 percent boost, with the increase varying by locality.
Trump earlier this year proposed ending the inflation adjustments under FERS and cutting half a percentage point off adjustments for those retired under CSRS. However, there has been no action in Congress on that proposal.