The FED Weekly

In this episode of The FED Weekly, we recap key developments for federal employees and retirees from December 28, 2025, to January 3, 2026. Highlights include President Trump’s executive order granting extended holidays, which resulted in forfeited use-or-lose leave for some workers. Federal health benefit premiums have surged again—up 12.3% for most and 11.3% for postal workers—outpacing inflation. Congress faces a looming January 30 funding deadline after a record-breaking shutdown last fall. Retirees receive a finalized 2026 COLA: 2.8% for CSRS/Social Security and 2.0% for FERS. Errors on annuitant statements are addressed, with reassurance on actual payments. Recent Social Security bills aim to improve services but don’t address major benefit reforms. Notably, the repeal of the windfall elimination provision is now in effect for the first full year. The 2026 federal pay raise is low—just 1%—except for law enforcement, who receive about 3.8%. Major executive actions are ending most telework and prompting union backlash amid significant workforce cuts, especially in education and veterans’ affairs. Retirement savings rules also change, with higher contribution limits and mandatory Roth catch-ups for higher earners.