Federal Retiree COLA vs. Federal Employee Pay Raises: What is the Difference?

Understand the distinction between the two — and why it matters to federal employees and retirees.

• PAY RAISES: When, why, and how they are applied—and what effect this has on your initial federal pension
• COLAs: When, why, and how they are applied—and what effect this has on how your federal pension changes over time
• PROJECTIONS: Current projections for 2026’s anticipated pay raises and how newly announced COLAs will be implemented in retirement
• DIFFERENCES: The main differences between how each is applied to CSRS and FERS—and the often significant financial impact on each