Congressman Gerry Connolly (D-VA), the Chairman of the Subcommittee on Government Operations, last week reintroduced the Equal COLA Act. The legislation aims to bring equity to the way the cost-of-living adjustment (COLA) is determined under the Civil Service Retirement System (CSRS) and Federal Employees Retirement System (FERS).
In January, CSRS employees received a 2.8 percent COLA, however, FERS employees received a 2.0 percent increase. This calculation in retirement benefits is due to legislation passed in 1986 when the FERS program was created.
For example,
- If a given year’s COLA is below 2 percent, FERS retirees would receive the full COLA;
- If the COLA is between 2 and 3 percent, FERS retirees would only receive 2 percent;
- And if the COLA increases by 3 percent of more, FERS retirees would receive one percent less.
“Over time, we now realize that this two-tiered system fails to protect FERS retirees who are living on a fixed income,” Connolly said. “This legislation will rectify this unfair system and ensure these dedicated public servants are protected throughout their retirement.”
Connolly’s legislation would amend U.S. Code so that COLAs for retirees under the FERS system will be calculated the same way as COLAs for retirees under CSRS going forward.
“Nearly 800,000 FERS retirees are paying the price for a flawed law dating back to the 1980s that capped their COLA at 2 percent when consumer prices increase between 2 and 3 percent per year. The Equal COLA Act is common sense legislation that would change this unfair policy to ensure FERS retirees receive a full COLA each year, and as a result, create parity between the FERS COLA and the Civil Service Retirement System (CSRS) COLA,” said National Active and Retired Federal Employees Associations (NARFE) National President Ken Thomas.
Text of the legislation can be found here.