Lawmaker Proposes Parity for Federal Pension COLAs

One northern Virginia lawmaker wants federal employees’ pension programs to have parity in how annual cost of living adjustments are applied, ending more than 30 years of what he described as an “unfair system.”

On Tuesday, Rep. Gerry Connolly, D-Va., introduced the Equal COLA Act, a bill that would ensure that enrollees in the Civil Service Retirement System and the Federal Employees Retirement System receive equal cost of living adjustments to their annuities each year.

Under current rules, which date back to 1986, the CSRS methodology for calculating cost of living adjustments is tied to the change in the consumer price index. But FERS COLAs are extrapolated from the CSRS adjustment: if the CSRS sees a COLA under 2 percent, FERS retirees receive the full COLA. If the adjustment is between 2 and 3 percent, FERS enrollees would only receive a 2 percent increase. And if the CSRS COLA is 3 percent or more, FERS retirees would receive that adjustment, minus 1 percentage point.

Connolly’s bill would ensure that FERS cost of living adjustments are calculated in the same way as CSRS COLAs each year, so that retirees in each program see the same increase in their annuities.

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

The bill has the support of unions and federal employee associations, including the National Active and Retired Federal Employees Association, American Federation of Government Employees, National Federation of Federal Employees, the Federal Managers Association and the Senior Executives Association.

In a statement, NARFE National President Ken Thomas urged Congress to approve the legislation in time for 2019. Next year, while CSRS retirees will see a 2.9 percent cost of living adjustment, FERS retirees will only receive an additional 2 percent.

“Nearly 800,000 FERS retirees are wondering why they are only receiving a 2-percent COLA when consumer prices increased by 2.8 percent,” Thomas said. “[Without] adequate COLAs, FERS retirees will see inflation erode the value of their earned retirement income year after year; yet, that is exactly what COLAs are designed to prevent. Federal retirees are not asking to be made better off than they were last year. We just want to maintain the value of what we have rightfully earned through careers of service.”