FederalDaily.com > The History of COLAs

FederalDaily - September 19, 2005

The History of COLAs

FEND readers have shown an interest in knowing what the Cost of Living Adjustments (COLAs) have been over the years. FEND's Informed Investor columnist, Edward Zurndorfer, answers this question. With respect to Civil Service Retirement System (CSRS) COLAs, CSRS annuitants receive the same COLAs as Social Security recipients. Here is a listing by year from the Social Security Web Site (www.ssa.gov):

Social Security Cost-Of-Living Adjustments

Year COLA
1975 8.0%
1976 6.4%
1977 5.9%
1978 6.5%
1979 9.9%
1980 14.3%
1981 11.2%
1982 7.4%
1983 3.5%
1984 3.5%
1985 3.1%
1986 1.3%
1987 4.2%
1988 4.0%
1989 4.7%
1990 5.4%
1991 3.7%
1992 3.0%
1993 2.6%
1994 2.8%
1995 2.6%
1996 2.9%
1997 2.1%
1998 1.3%
1999 2.5% *
2000 3.5%
2001 2.6%
2002 1.4%
2003 2.1%
2004 2.7%

*The COLA for December 1999 was originally determined as 2.4 percent. Pursuant to Public Law 106-554, however, this COLA is effectively now 2.5 percent.

For Federal Employees Retirement System (FERS) annuitants, here is how it
works: Take the CSRS COLA. If that amount is more than 3%, the FERS COLA is 1% less (e.g, CSRS COLA is 3.5%, the FERS COLA is 2.5%). If the CSRS COLA is more than 2% but less than 3%, then the FERS COLA is 2%. If the CSRS COLA is less than 2%, then the FERS COLA is the same.

FEHBP Premiums for 2006 Announced

The Office of Personnel Management (OPM) on Sept. 15 announced an average premium increase of 6.6 percent in the 2006 Federal Employees Health Benefits Program (FEHBP). OPM said this increase is the smallest in nine years. FEHBP is the nation's largest employer-sponsored health program; it covers approximately 8 million current and retired federal employees, as well as their dependents. On average, the federal government pays 72 percent of total premiums. While the 2006 total average premium increase is 6.6 percent, OPM said 80 percent of FEHBP enrollees are currently covered by plans in which premiums will rise between 2.5 percent and 15 percent. In 2006, individuals with self-only coverage will see an average bi-weekly premium increase of $5.30; the average bi-weekly premium increase for self and family coverage will be $12.79. In 2006, there will be 279 plan choices, an increase from 249 this year and 205 in 2004. Open Season is from Nov. 14 through Dec. 12, 2005. The National Treasury Employees Union (NTEU) said average 6.6 percent increase in premiums is too high. The union president, Colleen Kelley, said the increase “far exceeds” federal employees’ potential pay raises.

New IG for Katrina Spending

Senate Homeland Security and Governmental Affairs Committee Chair Susan Collins, R-Maine, and Ranking Member Joseph Lieberman, D-Conn., announced their plans to introduce a bill that would direct the Special Inspector General for Relief and Reconstruction (SIGR) to oversee and audit federal Katrina-related expenditures which, to date, already exceed $60 billion. The senators' proposal would expand the authority of the inspector general (IG) for Iraq reconstruction without diverting any resources from oversight of expenditures in Iraq , Collins and Lieberman said. The IG's oversight would include: a 24-hour fraud, waste, and abuse hotline, widely publicized in the Gulf Region; hiring, coordinating and deploying auditors and investigators to the Gulf Region; an oversight plan that includes audits of no-bid contractors; and reporting regularly to Congress on the status of Hurricane Katrina activities.

Health Care Dollars Approved for Outsourcing

Language that repeals a nearly 25-year-old ban on spending Department of Veterans Affairs (VA) health care budget dollars on contracting out studies passed through the Senate VA Committee last week. On Sept. 15, the committee marked up S. 1182, the Veterans Health Care Act of 2005, and voted to repeal the ban. This means VA health care money can be used for contracting out studies. In an effort to keep the prohibition against contracting out studies intact, Sen. Daniel Akaka, D-Hawaii, offered an amendment that would have removed repeal from the Veterans Health Care Act. However, the amendment was voted down. The American Federation of Government Employees expressed great disappointment at the committee’s action.

President Encouraged to Push Telework

Rep. Frank Wolf, R-Va., wrote to President Bush on Sept. 15 asking him to support a strong telework system in the federal government, particularly so federal workers would be able to continue to work in the event of emergencies such as Hurricane Katrina. Wolf’s letter urged the president to “embrace telework as a workplace priority for both the public and private sectors to improve continuity of operations.” Frank pointed out that the General Services Administration is making efforts to pay the costs at telework centers for federal employees who want to telework as a result of high fuel costs and Hurricane Katrina. But he said the federal government should do more. Frank said the proven benefits of telecommuting include energy savings, air quality, employee productivity and employee cost savings.

Bush Approves BRAC Recommendations

President Bush approved all of the recommendations in the Base Realignment and Closure (BRAC) Commission’s report. The president sent the report to Congress for an up-or-down vote. Congress has 45 legislative days to accept or reject the list of recommendations to restructure military facilities. Congress is not authorized to make changes to the final report. Department of Defense (DoD) Secretary Donald H. Rumsfeld released 190 recommendations for closing and realigning military installations on May 13. The commission approved 86 percent of DoD's original recommendations—119 with no change and another 45 with amendments. The commission approved 22 major base closures.