2020 COLA Fails to Keep Pace with Rising Costs for Federal Government Retirees, Social Security Recipients
October 10, 2019
Alexandria, Va. – In response to the 2020 cost-of-living adjustment (COLA) for federal retirement annuities and Social Security benefits announced today by the Bureau of Labor Statistics, NARFE National President Ken Thomas issued the following statement:
“The 2020 COLA of 1.6 percent will do little, if anything, to help the millions of federal retirees who spent their working years serving the public. The same people face a 5.6 percent average increase next year to health care insurance premiums in the Federal Employees Health Benefits (FEHB) program, alone. Add to that the fact that retirees disproportionately incur greater medical costs than any other segment of the population. For years, NARFE has urged Congress to address this problem by passing legislation requiring the Bureau of Labor Statistic (BLS) to calculate COLAs based on the consumer price index for the elderly (CPI-E) instead of the consumer price index for workers (CPI-W). Looking beyond calculations, it’s imperative to remember that these are real people – not numbers on a sheet of paper – who are already financially struggling, and yet, year after year, they watch their retirement incomes fade away because Congress has done nothing.
“I urge Congress to pass legislation requiring COLAs for federal retirement annuities, Social Security recipients and veterans to be based on the more accurate CPI-E measurement. That’s not just common sense; it makes smart financial sense, too.”
Background:
• Presently, COLAs are based on the consumer price index for workers (CPI-W), a measurement of how urban wage earners and clerical workers under the age of 62 spend their money. Yet, since 1982, the BLS has calculated the CPI-E, which specifically measures prices experienced by those 62 years of age and older.
• For years, the CPI-E has demonstrated that prices increase for seniors by 0.2 percent more, on average, than for the population measured by the CPI-W.
• Introduced in March, H.R. 1533, the Fair COLAs for Seniors Act, would require COLAs for federal retirement annuities and Social Security benefits, as well as for military retirement and veterans’ benefits, to be based on the CPI-E, instead of the CPI-W. This proposed legislation has not been considered by any of the four House committees with jurisdiction over it.
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