Federal retirees just got their answer for 2027 — and it is a split one. The Office of Personnel Management confirms that retirees under the Civil Service Retirement System will see a 3.6% cost-of-living adjustment, while most retirees under the Federal Employees Retirement System will get 2.6%.
The increase takes effect December 1, 2026. The first bigger annuity payment lands Monday, January 4, 2027, because January 1 is a federal holiday and January 2 and 3 fall on a weekend. That payment covers the December 2026 annuity month, so the new rate is in your pocket from the very first check of the year.
The 3.6% figure comes from the same math behind Social Security’s increase, which the Social Security Administration announced on October 14, 2026. Prices, measured by the Consumer Price Index for Urban Wage Earners (CPI-W), rose 3.6% across July, August and September 2026 compared with the same three months of 2025. It is the biggest annual increase since 2024’s 3.2%, and it is up from the 2.8% CSRS retirees received for 2026.
Why FERS gets less than CSRS
The one-point gap is not a mistake, and it is not a cut. It is the FERS law working exactly as written.
Under 5 U.S.C. § 8462, FERS annuities follow a three-band formula. When inflation is 2% or less, FERS retirees get the full increase. When it lands between 2% and 3%, FERS gets a flat 2%. And when it tops 3%, as it did this year, FERS gets the increase minus one percentage point. So 3.6% minus one point is 2.6%.
CSRS has no such haircut. CSRS annuitants, like Social Security beneficiaries and military retirees, get whatever the CPI-W produces, in full, every year.
What it means in dollars
Take a $3,000-a-month annuity. A CSRS retiree’s check rises by $108 a month, to $3,108 — an extra $1,296 over the year. A FERS retiree’s check rises by $78 a month, to $3,078 — an extra $936 a year. The gap is $30 a month, or $360 a year, on that annuity.
On a $2,000 annuity, the difference is smaller but still real: $72 a month for CSRS versus $52 for FERS, a $20 monthly gap. And the gap compounds. Every future COLA applies to a slightly smaller base for the FERS retiree, so the one-point difference this year keeps costing a little more with each passing year. That is why the split matters far more over a 20-year retirement than it looks on a single paycheck.
Who gets nothing yet
There is a second, bigger divide inside FERS, and it has nothing to do with percentages. Most FERS retirees under age 62 get no COLA at all until they turn 62. The first one arrives in the January after their 62nd birthday, at the full amount.
Three groups are exempt from the age rule and get the 2.6% at any age: disability retirees, survivors, and special-provision retirees such as law enforcement officers, firefighters and air traffic controllers. CSRS retirees face no age test either — the full COLA applies from the start of the annuity.
If you retired during 2026, your first COLA is prorated. OPM scales it by the number of months you were retired before December 1, so someone who retired in June gets roughly half the increase. Anyone whose annuity starts in 2027 gets no part of this COLA at all; their first adjustment comes with the December 2027 increase.
What the COLA does not touch
The adjustment applies to the basic annuity only. The FERS annuity supplement — the bridge payment that covers the gap until Social Security starts at 62 — never gets a COLA. If the supplement is a large part of your monthly income, your total increase will be smaller than 2.6% of your whole check.
One smaller piece does get the full 3.6%: the FERS Basic Employee Death Benefit, paid to the survivors of federal employees who die in service, rises to about $45,377, up from $43,800.53.
The push to close the gap
Federal retiree groups have been trying to end the FERS haircut for years. The Equal COLA Act, introduced as H.R. 491 in the House and S. 624 in the Senate, would give FERS retirees the same full COLA as CSRS. It has not passed, and there is no sign it will move in the lame-duck session that opened today. For 2027, the 2.6% figure is final.
The same 3.6% also lifts Social Security, where the average retired worker’s benefit rises from about $2,095 to about $2,170 a month, and military retired pay. VA disability pay is set to rise 3.6% as well, but only if Congress passes the Veterans’ Compensation Cost-of-Living Adjustment Act — as of today, that bill is still sitting in committee, so the VA figures remain projections, not law.
One more date for the calendar: Federal Benefits Open Season for plan year 2027 opened today, November 9, and runs through December 14. That is the window to change health coverage, and it is worth checking your plan’s 2027 premium alongside the COLA news, since a premium rise can eat into the increase.
Annuity payments themselves are mandatory spending, so the December 11 government funding deadline does not stop them. Whatever Congress does or does not pass in the lame duck, the January 4 payment with the new rate is already locked in.
FAQ: Federal retiree COLA 2027
What is the 2027 COLA for federal retirees?
CSRS annuitants get 3.6% and eligible FERS annuitants get 2.6%, effective December 1, 2026. The figures come from OPM, based on the 3.6% rise in the CPI-W announced by the Social Security Administration on October 14, 2026.
When will I see the increase in my payment?
In the annuity payment dated Monday, January 4, 2027, which covers December 2026. January 1 is a holiday and January 2–3 fall on a weekend, so January 4 is the first business day of the year.
Why does FERS get less than CSRS?
The FERS law, 5 U.S.C. § 8462, gives FERS retirees the COLA minus one percentage point whenever inflation tops 3%. At 3.6%, that means 2.6%. CSRS has no such reduction and gets the full increase.
I am a FERS retiree under 62. Do I get the 2027 COLA?
Generally no. Most FERS retirees get no COLA until age 62, with exceptions for disability retirees, survivors, and special-provision retirees such as law enforcement officers, firefighters and air traffic controllers, who get it at any age.
Does the COLA apply to the FERS annuity supplement?
No. The supplement never receives a cost-of-living adjustment. The COLA applies to the basic annuity only, so your total monthly increase may be less than 2.6% of your whole check.
Sources
- OPM, Learn more about cost-of-living adjustments (COLA)
- Social Security Administration, 2027 COLA announcement, October 14, 2026 (ssa.gov)
- 5 U.S.C. § 8462, FERS cost-of-living adjustments
- OPM Benefits Administration Letter 26-101 (2027 COLA: CSRS 3.6%, FERS 2.6%)
- GovExec, Federal retirees face new COLAs, premiums and earnings limits