The "Equal COLA Act" increases the annual cost-of-living adjustments (COLAs) for Federal Employees Retirement System (FERS) annuities to match the percentage change in the price index. This adjustment will be applied to COLAs made after the enactment of this act, regardless of when the annuity began.
Gerald Connolly
Representative
VA-11
The Equal COLA Act aims to provide fair cost-of-living adjustments (COLAs) for Federal Employees Retirement System (FERS) annuities. Starting December 1 of each year, annuity payments will be increased based on the percentage change in the price index between the base quarters of the current and previous years, rounded to the nearest 1/10 of 1 percent. This adjustment applies to COLAs made after the enactment of this Act and to annuities starting before, on, or after that date, ensuring retirees receive adequate support to keep pace with inflation.
Equal COLA Act: Federal Retiree Annuities to Get Full Inflation Adjustment
The Equal COLA Act is all about giving retired federal workers a raise to keep up with the actual cost of living. Instead of some complicated formula, this bill says that annual adjustments to Federal Employees Retirement System (FERS) annuities will fully reflect the change in the Consumer Price Index (CPI).
Keeping Up With Inflation
This bill directly changes how the government calculates cost-of-living adjustments (COLA) for FERS retirees. Starting December 1st of each year, annuity payments will be increased based on how much the price index changed from the previous year, rounded to the nearest tenth of a percent (SEC. 2). So if inflation goes up 3.2%, retirees' checks go up 3.2%. Simple, right?
Who Benefits?
This change impacts anyone receiving a FERS annuity—whether they retired before, on, or after this bill becomes law (SEC. 2). For example, imagine a former postal worker who retired in 2020. Under the old rules, their COLA might not have fully matched inflation. With the Equal COLA Act, their annuity will now be adjusted to reflect the full percentage increase in the CPI, helping them maintain their buying power.
Real-World Impact
This is a big deal for federal retirees on fixed incomes. It means more money in their pockets to cover the rising costs of groceries, housing, and healthcare. Think of a retired teacher who relies on their FERS annuity. A full COLA ensures they can still afford the same standard of living, even as prices go up. It’s about making sure their retirement income doesn’t shrink in real terms. This also means that retirees have more disposable income, which can be a boost for local businesses.
The Bottom Line
The Equal COLA Act ensures that the retirement benefits of federal employees aren't eroded by inflation. It's a straightforward fix to make sure that the people who spent their careers serving the public can retire with financial security. The challenge, of course, will be in the government budgeting process. While this is a clear win for retirees, Congress will need to account for these increased payments in the federal budget.