COLA Announcement Reinforces Need for a New COLA Formula

Alexandria, VA – 10/13/17 – The cost-of-living adjustment (COLA) to federal civilian retirement annuities and Social Security benefits will be 2.0 percent in 2018, pursuant to the latest consumer price data released this morning by the Bureau of Labor Statistics (BLS). Richard Thissen, president of the National Active and Retired Federal Employees Association (NARFE), issued the following statement in response:

“Following two years of no and low cost-of-living adjustments (COLAs), today’s announcement was eagerly awaited by millions of Americans who rely on the increase to keep up with the rising prices for food, housing, gas and medical care. Unfortunately, the 2.0 percent COLA provides only partial relief and serves as a reminder that our method for calculating the increasing cost of goods and services is out of sync with the reality faced by federal annuitants, Social Security recipients and military retirees. Our nation’s seniors spend more than twice as much on medical care than the population measured by the current formula to calculate COLAs, the CPI-W. Congress must act to implement a new formula that adequately measures costs incurred by seniors.

“The COLA is outpaced by the average 6.1 percent increase in health care premiums for federal retirees in 2018. On top of this, Medicare premiums increased disproportionately for most federal annuitants during the last two years, and long-term care premiums sharply increased by 83 percent, on average. A new a cost-of-living formula that doesn’t force these Americans to take one step forward, then two steps back is long overdue.

“Today’s COLA announcement highlights why Congress should require use of the CPI-E (Consumer Price Index for the elderly) as the measurement for setting COLAs. It is crystal clear that the current formula does not accurately reflect how seniors spend their limited annuities.”

Source: National Active and Retired Federal Employees Association

Leave a Reply

Your email address will not be published.