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Relevant to the cost-of-living-adjustment to civil service annuities for 2015, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased by 0.21 percent in June.
As determined in October, federal retirees received a 1.5 percent cost-of-living adjustment (COLA) to their civil service annuities in January 2014, the same increase for Social Security benefits and military retirement annuities.
The new CPI-W figure for June 2014 was 234.702, 1.90 percent higher than the average CPI-W for the third-quarter of 2013, which was 230.327 (1982-84 = 100). The 2013 third-quarter average is the reference figure for determining the 2015 COLA.
Under current law, COLAs for federal retirement annuities, as well as for military retiree annuities and Social Security payments, are determined in reference to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is calculated by economists and statisticians with the Bureau of Labor Statistics (BLS). The CPI-W is the current index used for measuring increases in the prices of consumer goods throughout the economy. It includes prices on all consumer goods, including food and beverages, housing, clothing, transportation, medical care, recreation, education, communication, and more. To learn more about how the BLS calculates the CPI-W, please click here.
NARFE continues to support strong COLAs based on fair assessments of increases in consumer prices to protect the value of federal annuities from inflation. NARFE also opposes a switch to the Chained CPI, which would result in lower COLAs.
Individuals receiving insurance benefits under the Federal Employees Compensation Act (FECA) received a 1.5 percent COLA in March 2014.
This number was determined after the December 2013 CPI-W was released (229.174) and compared to the December 2012 CPI-W. Because the December 2013 CPI-W figure (229.174) was 1.5 percent higher than the December 2012 CPI-W figure (225.889), FECA benefits increased 1.5 percent in March.
FECA COLA’s are determined by a different statutorily-set methodology than the COLA for other federal retirees. Benefits awarded under the Federal Employees Compensation Act (FECA) to individuals suffering work-related injuries or illnesses, are adjusted according to each calendar year’s percentage change in the CPI-W (rather than as measured by the change from the highest previous third quarter average).
Looking ahead to the 2015 COLA for FECA benefits, the June 2014 CPI-W figure (234.702) is 2.41 percent higher than the December 2013 CPI-W figure (229.174).
The Consumer Price Index for July 2014 is scheduled to be released on Tuesday, August 19, 2014, at 8:30 a.m. (EDT).
Monthly % Change
% Toward 2015 COLA
NARFE (National Active and Retired Federal Employees Association)
606 N. Washington St., Alexandria, VA 22314, Phone: (703) 838-7760, Fax: (703) 838-7785. © Copyright 2012 NARFE
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