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Articles | No 2011 Federal Retiree COLA: CSRS and FERS
No 2011 Federal Retiree COLA:
CSRS and FERS
Under current law, there will be no 2011 cost-of-living adjustment (COLA) for
Social Security recipients and annuitants in the Civil Service Retirement
System (CSRS), and annuitants in the Federal Employees Retirement System (FERS).
This is the second year in a row that retirees have seen no COLA increase.
The Social Security Act provides for an automatic COLA increase if there is
an increase in the Consumer Price Index for Urban Wage Earners and Clerical
Workers (CPI-W) from the third quarter of the last year a cost-of-living
adjustment (COLA) was determined to the third quarter of the current year.
As determined by the Bureau of Labor Statistics, there is no increase in the
CPI-W from the third quarter of 2008, the last year a COLA was determined, to
the third quarter of 2010, therefore, under existing law, there can be no COLA
According the Social Security Administration, other
changes that would normally take effect based on changes in the national average
wage index also will not take effect in January 2011. Since there is no
COLA, the statute also prohibits a change in the maximum amount of earnings
subject to the Social Security tax as well as the retirement earnings test
exempt amounts. These amounts will remain unchanged in 2011.
2011 Medicare Changes
Information about Medicare changes for 2011, when available, will be found at
Department of Health and Human Services has not yet announced if there will be
any Medicare premium changes for 2011. Should there be an increase in the
Medicare Part B premium, the law contains a "hold harmless" provision that
protects more than 70 percent of Social Security beneficiaries from paying a
higher Part B premium, in order to avoid reducing their net Social Security
benefit. Those not protected include higher income beneficiaries subject
to an income-adjusted Part B premium and beneficiaries newly entitled to Part B
in 2011. In addition, almost 20 percent of beneficiaries have their
Medicare Part B premiums paid by state medical assistance programs and thus will
see no change in their Social Security benefit. The state will be required
to pay any Medicare Part B premium increase.
The Outlook for the 2012 COLA
According to the National Association of Active and Retired Federal Employees
(NARFE), "whether there is an automatic COLA for 2012 will depend on whether the
CPI-W for July, August, and September of 2011 is higher than the 2008 third
quarter average. The September CPI-W figure (214.306) is still 0.55% below
that figure (215.495)."
For more information, visit:
Social Security Administration: