NARFE is urging federal employees and retirees to ask their members of Congress to cosponsor the Equal COLA Act, which would give FERS retirees full cost-of-living adjustments on their annuities.
Key Facts
- The bills: H.R. 491 in the House and S. 624 in the Senate, both titled the Equal COLA Act.
- The goal: Provide FERS retirees full COLAs to better preserve the purchasing power of their annuities, according to NARFE News.
- The ask: NARFE wants federal employees and retirees to contact their senators and representatives and urge them to cosponsor the legislation.
- Who is affected: Current and future FERS retirees.
How FERS COLAs Work Now
Under current law, FERS COLAs are tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) but are limited when inflation rises:
- CPI-W increase of 2% or less: FERS retirees receive the full increase.
- CPI-W increase between 2% and 3%: FERS COLA is capped at 2%.
- CPI-W increase above 3%: FERS COLA equals the CPI-W increase minus 1 percentage point.
CSRS retirees receive the full CPI-W increase. Most FERS retirees also do not become eligible for COLAs until age 62, though exceptions apply to groups such as disability retirees and survivors, as well as law enforcement officers, firefighters and air traffic controllers.
What It Means For You
If you are under FERS, a reduced COLA compounds over time. An illustrative example: if CPI-W rises