Congressman Gerry Connolly (D-VA), Vice Ranking Member of the House Oversight and Government Reform Committee, Tuesday introduced 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 will receive a 2.8 percent, however, FERS employees will receive a 2.0 percent increase. This difference in treatment in retirement benefits is due to legislation passed in 1986 that created FERS.
The following table summarizes the FERS COLA in relation to the CSRS COLA:
|
If the CSRS COLA is… |
Then the FERS COLA is… |
|
Up to 2.0% 2.0% to 3.0% Above 3.0% |
Same as CSRS COLA 2.0% CSRS COLA minus 1.0% |
RELATED:
- Federal Employee Pay Raises vs. Retiree COLAs
- Guide to Federal Retiree COLAs: What Are They and How Are They Calculated?
“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.”
According to Connolly, this 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.
The bill is supported by the National Active and Retired Federal Employees Association (NARFE), the National Federation of Federal Employees (NFFE), the American Federation of Government Employees (AFGE), the Federal Managers Association, National Association of Postal Supervisors , and the Senior Executives Association.
NARFE National President Ken Thomas issued the following statement last week:
“NARFE thanks Congressman Connolly for leading the effort to provide FERS retirees a full COLA each year based on the actual measured change in consumer prices. This is a common-sense policy that will allow FERS annuities to keep up with inflation.
“Pursuant to federal law and the annual change in consumer prices measured by the Bureau of Labor Statistics (BLS), the COLA to Civil Service Retirement System (CSRS) annuities and Social Security benefits will be 2.8 percent in 2019. Unfortunately, it will be only 2 percent for FERS annuities.
“Nearly 800,000 FERS retirees are wondering why they are only receiving a 2 percent COLA when consumer prices increased by 2.8 percent. The unsatisfying answer dates back to when FERS was created in the 1980s and a bargain was struck in Congress that limited the FERS COLA to 2 percent when consumer prices increase between 2 and 3 percent. That was the wrong policy then, as it is now, because it prevents FERS annuities from keeping up with inflation, which is the whole point of a COLA.
“Congressman Connolly’s legislation would change this unfair policy to ensure FERS retirees receive a full COLA each year. If swiftly enacted, his bill would ensure FERS retirees receive a 2.8 percent COLA instead of a 2 percent COLA next year. Moving forward, the legislation creates parity between the FERS and CSRS COLAs.
“Without adequate COLAs, FERS retirees will see inflation erode the value of their earned retirement income year after year; yet, that is exactly what COLAs are designed to prevent. Federal retirees are not asking to be made better off than they were last year. We just want to maintain the value of what we have rightfully earned through careers of service.”
“NARFE thanks Congressman Connolly for leading the effort to provide FERS retirees a full COLA each year based on the actual measured change in consumer prices. This is a common sense policy that will allow FERS annuities to keep up with inflation,” said NARFE National President Ken Thomas.
Text of the legislation can be found here (2-page PDF).