Federal retirees' cost-of-living increases announced

Retired federal employees will receive either a 2.4 percent or 2 percent cost-of-living increase in their pensions next year.

The cost-of-living adjustment (COLA) for retirees covered by the Federal Employees Retirement System will be 2 percent, while retirees under the Civil Service Retirement System will get a 2.4 percent COLA. The COLA is also 2.4 percent for Social Security beneficiaries. The increase is low this year because inflation has been kept under control, SSA Commissioner Kenneth Apfel said.

Retirees will see the increases in the checks they receive in January 2000, which cover the month of December.

The formula for determining COLAs, which is set in law, is based on the change in the Consumer Price Index for urban wage earners from the third quarter of one year to the third quarter of the next year. If the change is between 2 and 3 percent, then FERS enrollees get a 2 percent COLA, while CSRS enrollees receive the full differential.

If the change is less than 2 percent, the FERS and CSRS COLAs are the same. Last year, for example, the COLA for both FERS and CSRS retirees was 1.3 percent. For the previous six years, COLAs under FERS were 2 percent, while CSRS increases ranged from 2.1 to 3 percent.