How is the federal GS COLA for 2026 calculated and who sets it?
Executive summary
The federal GS (General Schedule) pay adjustment for 2026 is determined through a mix of White House proposals, Office of Personnel Management (OPM) implementation, and Congress’ authority — with the White House proposing a 1% across‑the‑board base pay increase for GS employees in 2026 and special higher increases for some law‑enforcement positions (example: 3.8%) [1] [2]. The annual cost‑of‑living adjustment (COLA) that affects federal retirees and Social Security benefits is calculated by the Social Security Administration using the CPI‑W change between the third quarter of consecutive years; 2026 COLA reporting and its impact on CSRS vs. FERS annuities followed that formula and produced a 2.8% figure for many retirees in 2026 (with FERS annuitants sometimes receiving a reduced “diet” COLA) [3] [4] [5].
1. Who proposes and who sets GS pay raises — presidential proposal, OPM mechanics, Congressional control
The President proposes a pay plan for civilian federal employees (the budget or an alternative pay plan), but Congress ultimately controls pay through appropriations and can override or amend proposals; the Office of Personnel Management (OPM) implements pay schedules once the raise is finalized and an Executive Order issues the official pay tables [1] [2]. Reporting on 2026 shows the White House proposed a 1% base increase for GS employees while congressionally approved mechanisms and OPM rules finalize locality rates and publish GS pay scales [1] [2].
2. How locality and GS base adjustments are calculated — data sources and methodology
Locality pay and comparability adjustments are computed using BLS compensation surveys and methodology OPM relies on — the Bureau of Labor Statistics’ National Compensation Survey and non‑federal pay comparisons feed the calculation of locality adjustments; OPM weighs federal employment and nonfederal averages to estimate the percentage needed to close pay gaps [6] [7]. Federal Salary Council documents describe multi‑stage weighted averages and survey job weighting to produce locality payment recommendations [7].
3. The retiree COLA calculation — CPI‑W third‑quarter comparison and SSA’s role
The COLA that affects Social Security and generally sets the benchmark for federal retiree annuities is calculated by the Social Security Administration using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI‑W). The SSA compares the average CPI‑W for July–September of the current year to the same quarter of the prior year and announces the official COLA in mid‑October [4] [3]. This is the statutory formula Congress has used for decades and is codified in prior legislative explanations [8].
4. Why CSRS and FERS retirees get different increases
CSRS retirees receive the full COLA as measured by SSA (e.g., CSRS got 2.8% for 2026), while FERS annuitants face a different statutory rule that can reduce their annuity increase: if the COLA is between 2% and 3% FERS typically receives a 2% increase; if over 3% FERS gets 1% less than the full COLA; if under 2% FERS gets the full COLA — creating predictable “break points” that often leave FERS annuitants with a smaller boost than CSRS recipients [5] [9]. That bifurcation has drawn criticism from retiree groups and lawmakers seeking parity [9].
5. The 2026 outcomes and political context
For 2026 the White House proposed a 1% GS base pay increase and a freeze of locality rates in some proposals, and separately the SSA‑calculated COLA for retirees landed in the mid‑single digits area cited by multiple outlets (SSA announced a 2.8% COLA for Social Security in 2026 with CSRS at 2.8% and FERS often getting a 2% “diet” COLA) [1] [3] [5] [10]. Reporting notes conflicting pressures: unions and lawmakers pressed for bigger GS raises, while the administration’s budgetary proposal sought limited or zero raises in other drafts, illustrating the political tug‑of‑war that ultimately decides final pay [11] [2].
6. Limitations, disputes and proposed changes
Key limitations: GS base pay proposals are just that — proposals until Congress acts and OPM publishes final tables [1] [2]. The CPI‑W measure and the third‑quarter comparison are entrenched, but critics and some Democrats have proposed switching to CPI‑E (Consumer Price Index for the Elderly) or other fixes that would boost COLAs for seniors — proposals triggered by debates over whether CPI‑W reflects retirees’ spending patterns [12]. Sources document the debate and legislative efforts but do not show a law changing the CPI basis for 2026 [12].
7. Practical takeaway for federal workers and retirees
Active GS employees should treat the White House number as a politically contingent starting point; final pay tables appear only after congressional and OPM action [1] [2]. Retirees should expect SSA’s announced COLA based on CPI‑W third‑quarter averages and then check whether FERS rules or CSRS entitlement applies, because FERS annuity increases can be capped below the SSA number depending on where the COLA falls [4] [5] [9]. Available sources do not mention any different calculation method beyond those described here [3] [4].