Federal pension checks to go up 2.6 percent

Federal retirees in the Civil Service Retirement System will get a 2.6 percent cost-of-living increase in their pension checks in January. The cost-of-living increase for retirees' annuities in the Federal Employees Retirement System will be 2 percent.

The Social Security Administration announced on Friday that the cost-of-living adjustment (COLA) for Social Security benefits would be 2.6 percent.

The COLAs are based on inflation as measured by the Labor Department's Consumer Price Index.

Civil Service Retirement System retirees get the full COLA each year. When the COLA is between 2 percent and 3 percent, Federal Employees Retirement System retirees get a 2 percent increase in their annuities. The increase under FERS only goes to retirees age 62 or older and to law enforcement officers and others who retire under special rules. In addition to their modest annuities, FERS retirees also receive Social Security benefits.

While federal retirees now know the size of their pension checks next year, federal employees are still waiting on Congress and President Bush to approve a pay raise figure. Congress is considering a 4.6 percent average increase for employees, while the Bush administration has been pushing a 3.6 percent increase.