Office of Personnel Management News Release

Washington, DC-- The U.S. Office of Personnel Management (OPM) says that retired federal employees and the surviving family members of deceased employees can expect a cost-of-living increase in the payments which will be delivered to them on January 2, 1997. OPM administers both of the retirement plans, the Civil Service Retirement System (CSRS) and Federal Employees Retirement System (FERS), which cover most federal civil servants and their surviving family members.

Under the CSRS, the cost-of-living increase will be 2.9 percent for those who have received benefits for at least one year. The 2.9 percent increase was determined by computing the percentage increase in the Consumer Price Index (CPI) for urban wage earners and clerical workers from the third quarter average of 1995 to the third quarter average of 1996, as provided by the U.S. Department of Labor, Bureau of Labor Statistics.

Under the FERS, the cost-of-living increase will be 2 percent for those who have received benefits for at least one year. This amount was derived from the same CPI comparison as for the CSRS. However, under this plan, when the increase is less than 3 percent, regulations provide for an adjustment that is equal to the CPI increase or 2 percent, whichever is less.

The increase is due, under both plans, in a prorated amount to annuitants who have not been on the roll for a full year. They get one-twelfth of the increase for each month they received benefits before the effective date of the cost-of-living adjustment (COLA), which is December 1, 1996. To get the full COLA, a retiree=s annuity must have begun no later than December 31, 1995. For a prorated COLA of one-twelfth, the benefit must have started by November 30, 1996. 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 1996 are due on January 2, 1997.

A benefit will not be increased if it would cause the annuitant to receive payments in excess of the cap amount specified by law. The attached tables show the actual prorated percentages that apply, under both plans, according to the month in which the annuity began.

Month Annuity Began	Amount of Percentage Increase
December 1995 or earlier	2.9
January 1996	2.7
February 1996	2.4
March 1996	2.2
April 1996	1.9
May 1996	1.7
June 1996	1.5
July 1996	1.2
August 1996	1.0
September 1996	0.7
October 1996	0.5
November 1996	0.2

Month Annuity Began	Amount of Percentage Increase
December 1995 or earlier	2.0
January 1996	1.8
February 1996	1.7
March 1996	1.5
April 1996	1.3
May 1996	1.2
June 1996	1.0
July 1996	0.8
August 1996	0.7
September 1996	0.5
October 1996	0.3
November 1996	0.2