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2.0 Percent COLA for Federal Retirees in 2018
October 13, 2017

There will be a 2.0 percent cost-of-living adjustment (COLA) for civil service annuities, Social Security benefits and military retirement annuities in 2018.

Each year’s COLA is determined by comparing the change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from year to year, based on the average of the third-quarter months of July, August and September. To trigger a COLA for the upcoming year, the average CPI-W for the third quarter must be greater than the highest previous third-quarter average.

The September CPI-W was 240.939. Combined with the CPI-W for July (238.617) and August (239.448), the 2017 third-quarter average is 239.668, or 2.0 percent greater than the average CPI-W for the third quarter of 2016, which was 235.057.

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.

FECA COLAs

Individuals receiving insurance benefits under the Federal Employees Compensation Act (FECA) received a 2.0 percent COLA in March 2017.

This number was determined by comparing the December 2016 CPI-W (235.390) to the December 2015 CPI-W (230.791). 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 2018 COLA for FECA benefits, the September 2017 CPI-W figure (240.939) is 2.36 percent higher than the December 2016 CPI-W figure (235.390).

The Consumer Price Index for October 2017 is scheduled to be released on Wednesday, November 15, 2017, at 8:30 a.m. (EDT).


 

CPI-W Monthly % Change % Toward 2019 COLA
July 2017 238.617 -0.08 -
Aug. 2017 239.448 0.35 -
Sept. 2017 240.939 0.62 -

 

 

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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