Federal retirees will see the largest annual increase in benefits payments in 40 years in 2022, as the Social Security Administration announced Wednesday that the annual Social Security cost-of-living adjustment will be 5.9%. The news prompted renewed calls for lawmakers to provide parity across the federal workforce’s retirement systems.
Social Security cost-of-living increases are calculated based on the annual change in the third quarter consumer price index for workers. The federal government’s Civil Service Retirement System also calculates enrollees’ annual annuity increases on that basis, meaning retirees who are enrolled in CSRS will see a 5.9% increase to their annuity payments next year.
But former feds who are enrolled in the newer Federal Employees Retirement System, which came into being along with the inception of the defined contribution Thrift Savings Plan, will only receive a 4.9% increase to their annuities.