House bill would equalize cost-of-living adjustments for federal retirees

At least one member of Congress wants to achieve parity for all federal retirees who receive an annual cost-of-living-adjustment.

Gerry Connolly (D-Va.), vice ranking member of the House Oversight and Government Reform Committee, has introduced the Equal COLA Act.

The bill would amend federal law to change the way cost-of-living-adjustments (COLA) are calculated for Federal Employee Retirement System (FERS) employees. The change would mean FERS retirees and participants in the Civil Service Retirement System (CSRS) would receive the same annual living adjustment.

The current procedure that government uses to calculate COLAs for FERS is disproportionately unfair, Connolly said.

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“Over time, we now realize that this two-tiered system fails to protect FERS retirees who are living on a fixed income,” he said Tuesday in a statement. “This legislation will rectify this unfair system and ensure these dedicated public servants are protected throughout their retirement.”

Connolly mentioned the bill in an interview with Federal News Network earlier this month when he described his priorities as a leading voice on the House Oversight and Government Reform Committee in the new Congress.

Starting in January, CSRS retirees will receive a 2.8 percent cost-of-living-adjustment. FERS retirees, however, are capped at 2 percent when the Social Security Administration announces a COLA between 2-and-3 percent, like the upcoming year. When COLAs fall below 2 percent, both FERS and CSRS retirees receive the same amount.

The National Active and Retired Federal Employees (NARFE) Association announced its support for the bill.

“Nearly 800,000 FERS retirees are wondering why they are only receiving a 2 percent COLA when consumer prices increased by 2.8 percent,” new NARFE National President Ken Thomas said Tuesday in a statement. “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 2 and 3 percent. That was the wrong policy then, as it is now, because it prevents FERS annuities from keeping up from inflation, which is the whole point of a COLA.”

The bill also has support from the American Federation of Government Employees, National Federation of Federal Employees, Federal Managers Association and Senior Executives Association.

“Federal employees are not asking to be made better off than they were last year,” Thomas added. “We just want to maintain the value of what we have rightfully earned through careers of service.”

The Trump administration earlier this year proposed a series of changes to the retirement system for current federal employees and retirees. One proposal suggested an elimination of the COLA for current and future FERS participants and a 0.5 percent cut to what the COLA formula allows for CSRS retirees.

Congress, however, never acted on those proposals from OPM. President Donald Trump has made similar recommendations in his budget proposals for fiscal 2019 and 2018, but lawmakers again never acted on them.