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The 2015 COLA will be 1.7 Percent
October 22, 2014

Federal retirees in the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS) will receive a 1.7 percent cost-of-living adjustment (COLA) to their civil service annuities beginning in January 2015, the same increase given to Social Security recipients.

This number was determined after the September Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) was released (234.170) and averaged with the CPI-W for July (234.525) and August (234.030).

The 2014 third quarter average is 234.242, or 1.7 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 was the reference figure for determining the 2015 COLA. The 2014 third quarter average will be the reference figure for determining the 2016 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. 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.
      
FECA 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 2014 COLA for FECA benefits, the September 2014 CPI-W figure (234.170) is 2.18 percent higher than the December 2013 CPI-W figure (229.174).

The Consumer Price Index for October 2014 is scheduled to be released on Thursday, November 20, 2014, at 8:30 a.m. (EDT).

 

CPI-W

Monthly % Change

% Toward 2016 COLA

July 2014 234.525 - -
Aug 2014 234.030 -0.21 -
Sep 2014 234.170 0.60 -

 

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. © Copyright 2012 NARFE

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