16 Things Seniors Born Between 1941-1969 Could Take Advantage Of
Senator Alex Padilla (D-CA) last month introduced legislation — the Equal COLA Act (S 4221) —that would guarantee federal retirees in the Federal Employee Retirement System (FERS) and the Civil Service Retirement System (CSRS) receive the same annual cost of living adjustment (COLA) each year. Under current law established in 1986, 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% |
As an example, this year while federal retirees in the CSRS program received a 5.9% COLA increase, FERS retirees received a 4.9% increase in their federal retirement annuity.
Support by NARFE
The National Active and Retired Federal Employees Association’s National President Ken Thomas endorsed the proposed legislation in this statement:
“Due to an inherently unfair policy, Federal Employee Retirement System (FERS) retirees do not receive a full cost-of-living adjustment (COLA) when consumer prices increase by more than 2 percent. That’s a departure from how COLAs are determined for both Civil Service Retirement System (CSRS) retirees and Social Security beneficiaries.
“FERS COLAs are capped at 2 percent when consumer prices increase between 2 and 3 percent, and are reduced by 1 percent when consumer prices increase by 3 percent or more. This policy, enacted in the 1980s with the creation of FERS, fails to fully protect the earned value of FERS annuities, which decrease in real value in times of high inflation—exactly what COLAs are intended to prevent.
“The Equal COLA Act would allow federal retirees to maintain the value of what they have rightfully earned through careers in public service by providing full COLAs to FERS retirees, creating parity between FERS COLAs and CSRS and Social Security COLAs.
“NARFE urges passage of this important bill, which will result in more equitable COLA calculations for FERS retirees.”
To read the full text of the bill, go here. A similar bill in the House was introduced by Congressman Gerry Connolly (D-VA) last year.