Section 848.503 - Cost-of-living adjustments(a) The phased retirement annuity under § 848.501 is increased by cost-of-living adjustments in accordance with 5 U.S.C. 8462 .(b) A composite retirement annuity under § 848.502 is increased by cost-of-living adjustments in accordance with 5 U.S.C. 8462 , except that 5 U.S.C. 8462(c)(1) does not apply.(c)(1) For the purpose of computing the amount of phased retirement annuity used in the computation under § 848.502(a)(1) , the initial cost-of-living adjustment applied is prorated in accordance with 5 U.S.C. 8462(c)(1) .(2) If the individual enters full retirement status on the same day as the effective date of a cost-of-living adjustment (usually December 1st), that cost-of-living adjustment, if applicable under 5 U.S.C. 8462 , is applied to increase the phased retirement annuity used in the computation under § 848.502(a)(1) .