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Consumer Prices Decreased in December, FECA COLA will be 0.4 Percent
January 20, 2016

Relevant to the cost-of-living-adjustment to civil service annuities for 2017, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) decreased by 0.40 percent in December 2015.

As announced in October, federal retirees will not receive a cost-of-living adjustment (COLA) to their civil service annuities in January 2016; the same is true for Social Security benefits and military retirement annuities.

The new CPI-W figure for December 2015 was 230.791, 1.47 percent lower than the average CPI-W for the third quarter of 2014, which was 234.242 (1982-84 = 100). Because there is no COLA in 2016, the 2014 third quarter average will still be the reference figure for determining the 2017 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, 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 specifically supports a switch to the Consumer Price Index for the Elderly (CPI-E), which would result in higher COLAs and opposes a switch to the Chained CPI, which would result in lower COLAs.

Individuals receiving insurance benefits under the Federal Employees Compensation Act (FECA) will receive a 0.40 percent COLA in March 2016.

This number was determined after the December 2015 CPI-W was released (230.791) and compared to the December 2014 CPI-W. Because the December 2015 CPI-W figure (230.791) was 0.4 percent higher than the December 2014 CPI-W figure (229.909), FECA benefits will increase 0.4 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).  

The Consumer Price Index for January 2016 is scheduled to be released on Friday, February 19, 2016, at 8:30 a.m. (EDT).

CPI-W Monthly % Change % Toward 2017 COLA
July 2015 233.806 0.00 -0.19
Aug 2015 233.366 -0.19 -0.37
Sept 2015 232.661 -0.30 -0.67
Oct. 2015 232.373 -0.12 -0.80
Nov. 2015 231.721 -0.28 -1.08
Dec. 2015 230.791 -0.40 -1.47



National Active and Retired Federal Employees Association
NARFE (National Active and Retired Federal Employees Association)
606 N. Washington St., Alexandria, VA 22314, Phone: (703) 838-7760, Fax: (703) 838-7785.

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