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Consumer Prices Increase in December, FECA COLA will be 2.0 Percent
January 18, 2017

Relevant to the cost-of-living-adjustment to civil service annuities for 2018, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 0.07 percent in December 2016.

Federal retirees received a 0.3 percent cost-of-living adjustment (COLA) to their civil service annuities in January 2017; the same is true for Social Security benefits and military retirement annuities.

The new CPI-W figure for December 2016 was 235.390, 0.14 percent higher than the average CPI-W for the third quarter of 2016, which will be used to determine the 2018 COLA, and was 235.057 (1982-84 = 100).

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) will receive 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).  

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

 

CPI-W Monthly % Change % Toward 2018 COLA
July 2016 234.789 -0.22  -
Aug. 2016 234.909 0.05  -
Sept. 2016 235.495 0.25  -
Oct. 2016 235.732 0.10 0.29
Nov. 2016 235.215 -0.2 0.06
Dec. 2016 235.390 0.07 0.14

 

 

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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