thedrifter
10-16-08, 02:15 PM
2009 COLA increase is biggest since 1982
By RICK MAZE
October 16, 2008
The Dec. 1 cost-of-living adjustment for federal retirees will be 4.8 percent or 5.8 percent, with the increase first appearing in Jan. 1 checks.
Annuitants and survivors in the Civil Service Retirement System will see the 5.8 percent increase. Those in the Federal Employees Retirement System will receive a 4.8 percent annuity adjustment.
COLAs are based on the annual change in the Consumer Price Index for Urban Wage Earners and Clerical Workers. When the CPI/W increases by 3 percent or more, CSRS employees receive the full increase in their annuities, while the COLAs of FERS beneficiaries are increased by the CPI/W minus 1 percentage point. FERS employees also receive Social Security benefits, which will rise 5.8 percent.
The 5.8 percent increase will also go to military retirees, and disabled veterans and survivors.
The 5.8 percent hike is a little less than some expected. In the last few months, rising crude oil prices had a broad effect across the economy — increasing not only the cost of filling up gas tanks but also boosting transportation costs to drive up the price of retail goods and food.
But oil prices have fallen as the overall economy has suffered a major meltdown, resulting in a final COLA that is still the biggest increase since 1982.
The COLA also is far bigger than the 3.9 percent pay raise for civilian employees and military personnel signed into law by President Bush. That’s because the two increases are based on different concepts.
Retired pay automatically increases each year to keep pace with inflation, measured by the change in the cost of goods and services. Increases in military and federal civilian pay, which generally involve an act of Congress, are designed to match private-sector wage growth.
Retirement COLAs, which also apply to survivor benefits, take effect automatically. Recipients do not have to do anything to get the extra pay.
Annual adjustments in veterans’ disability pay, low-income pensions and dependency and indemnity compensation for survivors of deceased service members and veterans are not automatic, but Congress usually passes legislation guaranteeing veterans’ benefits will increase by the same rate as Social Security.
President Bush signed the 2009 veterans’ COLA measure Sept. 25.
Tell us what you think. E-mail Rick Maze or Federal Times.
Ellie
By RICK MAZE
October 16, 2008
The Dec. 1 cost-of-living adjustment for federal retirees will be 4.8 percent or 5.8 percent, with the increase first appearing in Jan. 1 checks.
Annuitants and survivors in the Civil Service Retirement System will see the 5.8 percent increase. Those in the Federal Employees Retirement System will receive a 4.8 percent annuity adjustment.
COLAs are based on the annual change in the Consumer Price Index for Urban Wage Earners and Clerical Workers. When the CPI/W increases by 3 percent or more, CSRS employees receive the full increase in their annuities, while the COLAs of FERS beneficiaries are increased by the CPI/W minus 1 percentage point. FERS employees also receive Social Security benefits, which will rise 5.8 percent.
The 5.8 percent increase will also go to military retirees, and disabled veterans and survivors.
The 5.8 percent hike is a little less than some expected. In the last few months, rising crude oil prices had a broad effect across the economy — increasing not only the cost of filling up gas tanks but also boosting transportation costs to drive up the price of retail goods and food.
But oil prices have fallen as the overall economy has suffered a major meltdown, resulting in a final COLA that is still the biggest increase since 1982.
The COLA also is far bigger than the 3.9 percent pay raise for civilian employees and military personnel signed into law by President Bush. That’s because the two increases are based on different concepts.
Retired pay automatically increases each year to keep pace with inflation, measured by the change in the cost of goods and services. Increases in military and federal civilian pay, which generally involve an act of Congress, are designed to match private-sector wage growth.
Retirement COLAs, which also apply to survivor benefits, take effect automatically. Recipients do not have to do anything to get the extra pay.
Annual adjustments in veterans’ disability pay, low-income pensions and dependency and indemnity compensation for survivors of deceased service members and veterans are not automatic, but Congress usually passes legislation guaranteeing veterans’ benefits will increase by the same rate as Social Security.
President Bush signed the 2009 veterans’ COLA measure Sept. 25.
Tell us what you think. E-mail Rick Maze or Federal Times.
Ellie