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How to Calculate Your 2012 COLA Payment

by Ian Smith |

On October 19, a 3.6% COLA was announced for employees under the Civil Service Retirement System (CSRS) who have had benefits for at least one year. Employees under the Federal Employees Retirement System (FERS) will get a 2.6% COLA if they have had benefits for at least one year. OPM has issued official guidelines for how this will be applied to federal retirees.

The COLA is effective December 1, 2011 and is first reflected in the annuity payment dated January 3, 2012.

Federal Employees Retirement System (FERS) and FERS Special Cost-of-Living Adjustments are not provided until age 62, except for disability, survivor benefits, and other special provision retirements. FERS disability retirees get the adjustment, except when they are receiving a disability annuity based on 60 percent of their high-3 average salary. Also, under FERS, if you have a CSRS component, the component is subject to the CSRS COLA calculation. FERS survivors receive the FERS increase on their entire annuity, even where component service is involved.

To get the full COLA, a retiree or survivor annuity must have begun no later than December 31, 2010. If not, the increase is prorated under both plans. Prorated accounts receive one-twelfth of the increase for each month they received benefits. For example, if the benefit commenced November 30, 2011, the prorated COLA would be one-twelfth of the full COLA.

Under both plans, benefits are paid on the first business day of the month after the month in which they accrue. Benefits which accrue in December 2011 are payable on January 3, 2012.

So how do these prorated percentages break out for retirees? The tables below show examples for both CSRS and FERS as calculated by the Office of Personnel Management.



Month Annuity Began

Percentage Increase

December 2010


January 2011 3.3%
February 2011 3.0%
March 2011


April 2011


May 2011


June 2011


July 2011


August 2011


September 2011 0.9%
October 2011 0.6%
November 2011 0.3%


Month Annuity Began

Percentage Increase

December 2010


January 2011


February 2011


March 2011


April 2011


May 2011


June 2011


July 2011


August 2011


September 2011


October 2011 0.4%
November 2011



OPM provides a list of past COLA amounts if you want to see how they have performed over the last 40 years.

Still have questions? You can contact the Office of Personnel Management for more information.

© 2014 FedSmith Inc. All rights reserved. This copyrighted article may not be reproduced without express written consent of FedSmith Inc.

About the Author

Photo of Ian Smith

Ian Smith

Ian Smith is one of the founders of FedSmith.com. He writes about current topics that impact federal employees.

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