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.

Death by a Thousand Cuts – Yet One More

Another Perspective

By: Donald L. Foley

If you have had any involvement with compensation contracts, then you know that cost of living adjustment (COLA) clauses never result in real economic advancement for the recipient of the adjustments. These adjustments, generally based on the consumer price index (CPI), give the person receiving them some percentage of the full rise in the cost of living as an upward adjustment in wages or salary or other compensation. They never fully keep up, much less advance the individual’s economic status. And they always come after-the-fact – that is, they are calculated on cost of living increases that have already taken a toll and they are applied in subsequent payments of income. Certainly, they are a worthwhile benefit to the recipient but that person will continue to slide just a little further behind economically in spite of receiving them.

Now comes more “shared sacrifice” from the Obama administration with, apparently, bipartisan support from members of Congress. This is the proposal to change the method of computing the CPI for the purpose of applying COLAs, changing to something called the Chained Consumer Price Index (reported by Stephen Ohlemacher, Associated Press). Allegedly this would “save” the federal budget almost twelve and a half billion dollars over the next decade. And we all know how important it is for all of us to share in the sacrifices necessary to get the federal budget out of the red.

Using this chained CPI, they say, is more realistic because for one thing it takes into account the fact that as prices go up people just naturally learn to live more poorly – and, consequently, don’t really have to spend more to live. In other words, becoming poorer does not have to be measured as becoming poorer. One of the real effects of changing to the use of the chained CPI will decrease COLAs for Social Security recipients on a regressive scale – by which, as one gets older and older, one loses more and more. It would also reduce federal military and civilian pensions by $112 billion over the next decade. And it would result in an effective tax increase on the poor far greater than any increase on the rich. By the end of the coming decade, taxpayers in the $10,000 to $20,000 income range will pay about 14.5% higher federal taxes, while taxpayers with more than $1 million income would see a tax increase of just 0.1%. And fewer people would become eligible for federal benefits as they slip deeper and deeper down the economic ladder, because they would take longer to fall below “poverty” level thresholds.

However, as I said, this idea has bipartisan support and was introduced to the debt debate by the White House. It is one of those sleight-of-hand maneuvers politicians are so good at; it involves some rather arcane mathematics and bookkeeping rules; and it is fairly obscure in its basic statement – just change to a “more realistic” CPI. Certainly, to slip through a change like this might go generally unnoticed and would not generate a large public outcry. It is not an overt increase in taxes, so the Republicans have plausible deniability; and the Democrats can claim they have not cut Social Security. How perfect could you get?

Perfect, indeed. Yet another perfect tactical thrust in the class warfare prosecuted for the past forty years so successfully by the ruling class against the working class.

National Call-In Days: July 14-15

TELL YOUR SENATORS DON'T CUT SOCIAL SECURITY

Your Social Security benefits are under attack by politicians in Washington. They want to: Cut Social Security's Cost-of-Living Adjustment (COLA) to reduce the deficit. But Social Security doesn't contribute a penny to the deficit. Raid Social Security by using your contributions to give a tax break to Wall Street banks, Big Oil and other corporations. They shouldn't get another taxpayer handout. Social Security belongs to you. You pay for it in every paycheck. Don't let them cut it or raid it! Call your Senators on Thursday and Friday, July 14-15, at 1-866-251-4044. Tell them: NO cuts to Social Security! NO cuts to Social Security's COLA! NO Social Security payroll tax holiday! Contact WI Alliance for Retired Americans 6333 W. Bluemound Road Milwaukee, Wisconsin 53213 414-771-9511 wiara@att.net

Postal Workers Cost Of Living Adjustment Is ZERO..Again!

APWU COLA Information:

In July, the Consumer Price Index (CPI-W) fell to 627.093, still well below the July 2008 index of 644.303 (upon which our last COLA increase was based). The CPI-W must rise above 644.303 before another COLA is due. After the final month of the six-month measuring period, the sixth COLA under the 2006 National Agreement and the Operating Services Agreement, which would have been effective Aug. 29, 2009 (pay period 19-09, pay date Sept. 18, 2009), will be zero.

The fifth COLA, which would have been effective March 14, 2009, was also zero, due to the fact that the January 2009 CPI-W had fallen below the July 2008 CPI-W (upon which our last COLA increase was based).

Editor: The next non-COLA salary increase: November 2009

Source: Postal Reporter.com