Federal Retirees Will See 4.9 Percent COLA Increase In 2022

The Social Security Administration (SSA) announced on October 13, 2021, that the annual Social Security cost-of-living adjustment (COLA) will be 5.9 percent in 2022 – this is the largest increase in benefits payments since 1982 when the COLA was 8.7 percent.

The federal government’s Civil Service Retirement System (CSRS) calculates the Social Security cost of living on the annual change in the third quarter consumer price index for workers. If CSRS sees an increase of under 2 percent, Federal Employees Retirement System (FERS) retirees receive the full COLA. If the adjustment is between 2 percent and 3 percent, FERS enrollees receive a 2 percent increase. And if the CSRS COLA is 3 percent or more FERS retirees receive 1 percentage point less.

Retirees enrolled in CSRS will see the 5.9 percent increase to their annuity payments in 2022, while retired federal employees who are enrolled in FERS will only receive a 4.9 percent increase to their annuities.

Ken Thomas, President of the National Active and Retired Federal Employees Association (NARFE) was ambivalent about this decision by the SSA. "Coming after years of low or no adjustments, this 5.9% COLA provides a buffer for seniors against recent inflation," NARFE President Thomas stated in a press release, "But for a significant number of federal retirees, the news is not quite as good: the January 2022 COLA will be 4.9% for those who retired under the Federal Employees Retirement System. This inequitable policy… fails to fully protect the earned value of FERS annuities, which decrease in value year after year—exactly what COLAs are intended to prevent.”

On January 13, 2021, Rep. Gerry Connolly (D-VA) introduced H.R.304 – the Equal COLA Act. The legislation is intended to achieve parity between the cost-of-living adjustment with respect to an annuity under FERS and CSRS. This bipartisan legislation that would ensure that federal retirees in FERS and CSRS both receive the same annual percentage cost of living increase each year.

Rep. Connolly (D-VA) first introduced the bill in 2018 with support from NARFE President Thomas.