Federal employees COLA for 2026
Executive summary
The 2026 retiree COLA has been set at 2.8% for Social Security beneficiaries and Civil Service Retirement System (CSRS) annuitants, while Federal Employees Retirement System (FERS) retirees will receive a reduced 2.0% “diet” COLA [1] [2]. For active federal civilians, the federal pay raise in proposals and guidance points to roughly a 1% base pay increase in 2026, with some law‑enforcement roles seeing larger special increases [3] [4].
1. COLA numbers: what was announced and who gets what
The Social Security Administration and multiple federal‑retiree advocates report a 2.8% COLA for 2026 that applies to Social Security payments and CSRS (and military) annuities; FERS annuitants are treated differently by statute and will receive a 2.0% COLA next year [1] [2] [5]. Coverage across trade and union outlets reiterates the two‑tier outcome: full COLA for CSRS/Social Security and the statutorily capped or “diet” COLA for many FERS retirees [1] [6].
2. Why FERS gets less: the statutory formula
The difference traces to the FERS COLA formula: when CPI‑W (the index used) increases between 2% and 3%, FERS annuitants receive a capped 2% rather than the full CPI‑based amount; if CPI‑W rises above 3%, FERS COLAs are reduced by one percentage point from the full rate [2]. Commentators and unions emphasize that this statutory quirk produces recurring gaps between FERS and CSRS increases [6].
3. Active federal pay: a separate issue from retiree COLA
Active employees’ wages are governed separately from retiree COLAs. Reporting on the 2026 federal pay outlook highlights a proposed 1% across‑the‑board base pay increase for most civilian federal workers in budget guidance, with locality pay frozen; select law‑enforcement positions may receive additional special increases [3] [4]. Other outlets note competing budget plans and legislative efforts that would change those numbers, so the 1% figure reflects administration proposals and tentative plans rather than final, implemented law [3] [4].
4. Context: inflation, premiums and political pressure
The 2026 COLA was calculated from CPI‑W data for the prior year and the October announcement followed delayed BLS data releases linked to a government shutdown; agencies say the 2.8% figure translates into roughly a $56 average monthly bump for Social Security beneficiaries [7] [6]. Unions and retiree groups counter that the COLA does not fully offset other cost increases that affect federal workers and annuitants, notably projected double‑digit rises in FEHB premiums next year, which advocates say will erode real income gains [6] [8].
5. Competing policy proposals and advocacy pushes
Legislative and union campaigns seek larger pay boosts and parity fixes. For example, bills have been introduced that would provide substantially larger raises—4.3% in one sponsorship—and the Equal COLA Act aims to eliminate the FERS “penalty,” reflecting organized labor pressure to change statutory treatment of FERS annuitants [9]. Those proposals underscore the political contest over whether the announced amounts represent final policy or a floor to be improved by Congress.
6. Practical impacts and timing for beneficiaries and employees
Retirees under CSRS and Social Security will see their January 2026 payments reflect the 2.8% increase; FERS retirees will see the 2.0% capped adjustment according to the statutory schedule and OPM/SSA timing rules [1] [10]. Active employees who receive the proposed 1% base increase would begin to see it in paychecks starting the first full pay period in January 2026 per agency guidance, but final pay tables and locality decisions normally appear from OPM later in the calendar [3] [4].
7. What reporting does not settle
Available sources do not mention whether Congress will alter the statutory FERS formula for 2026 or offset FEHB premium increases with separate legislation before payments change; they also do not provide final signed appropriations that could alter the proposed 1% pay raise for active employees (not found in current reporting). Analysts’ mid‑year projections published earlier in 2025 suggested a different potential COLA range, but the official October determination supersedes those estimates [11] [7].
8. Bottom line for federal workers and retirees
The official, reported outcome for 2026 is a modest 2.8% COLA for CSRS and Social Security and a 2.0% COLA for many FERS retirees, while active civilian employees face an administration proposal of roughly a 1% base pay increase with certain special‑pay exceptions—numbers that unions and advocates argue won’t fully compensate for rising health‑care costs and inflationary pressures [2] [3] [6] [8]. Those tensions frame likely near‑term policy fights in Congress and union advocacy focused on larger raises or statutory fixes for FERS [9].