Rep. Gerry Connolly (D-VA) reintroduced legislation Wednesday that would increase cost of living adjustments (COLA) for some retired federal employees.
If passed, the Equal COLA Act would make the annual COLA for both the Civil Service Retirement System (CSRS) and the Federal Employee Retirement System (FERS) equivalent to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
Under current law, CSRS COLAS are calculating based on the annual change in the third quarter consumer price index for workers, which is the same formula for Social Security retirement benefits. However, for FERS retireees, the COLA is adjusted as follows:
“This two-tiered system fails to protect FERS retirees who are living on a fixed income,” said Connolly. “This legislation will rectify this unfair system and ensure these dedicated public servants are protected throughout their retirement.”
The Equal COLA Act is endorsed by the National Active and Retired Federal Employees Association (NARFE) and the National Treasury Employees Union (NTEU).
“The time has come for parity in how cost-of-living increases are calculated for federal retirees,” said Tony Reardon, National President of the NTEU. “The Equal COLA Act … is exactly the right solution, by making sure that FERS and CSRS annuitants are treated equally and fairly when economic conditions require a cost-of-living increase for these retired civil servants. NTEU strongly supports this legislation because it honors their public service and provides the secure retirement they deserve.”
“The Equal COLA Act would ensure federal retirees maintain the value of their retirement annuities, earned through careers in public service, by providing full COLAs to FERS retirees,” said William Shackelfor, National President of the NARFE. “Unfortunately, when inflation is high, as it has been recently, FERS retirees only receive a diet COLA, reduced by as much as 1 percentage point. This may not seem like a lot at first glance, but when the reduction compounds year after year, it may cost an average FERS retiree tens of thousands of dollars over the course of their retirement – and even more for some.”
To read the full text of the Equal COLA Act go here.