2013 COLA Announced: Federal Annuities Will Rise Next Year

WASHINGTON, DC – The National Active and Retired Federal Employees Association (NARFE) was pleased to inform its members today that federal retirees will receive a cost-of-living adjustment (COLA) to their civil service annuities beginning in January 2013. Retirees in the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS) will receive a 1.7 percent increase to their annuities next year, the same increase given to Social Security recipients.

 

“We at NARFE are pleased to hear that retirees will receive some relief from the rising costs of everyday goods,” commented NARFE president Joseph A. Beaudoin. “NARFE continues to support strong COLAs based on fair assessments of increases in consumer prices, including medical costs, to keep federal annuities in line with inflation.”

 

To trigger a COLA for 2013, the average CPI-W for the months of July, August and September of 2012 needed to rise above the 2011 average for those same months. It did, by 1.66 percent, which results in a 1.7 percent COLA for federal annuitants covered by both CSRS and FERS.

 

Under current law, COLAs for federal retirement annuities, as well as for military retiree annuities and Social Security payments, are determined in reference to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is calculated by economists and statisticians with the Bureau of Labor Statistics. The CPI-W is the current index used for measuring increases in the prices of consumer goods throughout the economy. It includes prices on all consumer goods, including food and beverages, housing, clothing, transportation, medical care, recreation, education, communication, and more.

 

“This is welcome news for retirees who have seen the cost of living continue to increase over the past year,” continued Beaudoin. “As Congress debates ways to avoid the ‘fiscal cliff,’ NARFE is prepared to oppose any changes to the COLA formula that would have an adverse effect on retirees.”

 

The new CPI-W figure for September 2012 was 228.184. The average CPI-W for the third-quarter of 2012 was 226.936. This is the new reference figure for determining the 2014 COLA.