§2131 Cost-of-living Adjustment of Annuities

Summary

Annuities from the fund must be raised by the same cost-of-living percentage that is set in 5 U.S.C. 8340(b). Each increase takes effect on the same date as the increase under 5 U.S.C. 8340(b). Normally an annuity is eligible if it began on or before that effective date. The first increase for a new retiree or for survivors of someone who died while working is pro-rated. That pro-rated increase equals one‑twelfth of the applicable percent change times the number of months the annuity has been paid before the effective date, up to 12 months, and is rounded to the nearest one‑tenth of one percent. A survivor’s annuity that starts after the annuitant’s death gets the full percentage increases the annuitant had at death. Child annuities starting after October 31, 1969, get dollar and percentage amounts raised by the total increases in force on or after that date. No cost-of-living increase applies to extra annuity bought at retirement with voluntary contributions. After an increase, the monthly payment is rounded down to the next lower dollar but must go up by at least $1. An increase cannot raise an annuity above the greater of (A) the GS‑15 maximum pay 30 days before the increase, or (B) the participant’s final (or higher average) pay grown by the compounded overall annual General Schedule pay adjustments from the annuity start to the increase date. “Pay” means the rate of salary or basic pay.