In COLA bump, not all fed retirees treated same

Tuesday - 10/25/2011, 10:18am EDT

David Snell, director of retirement benefits, NARFE

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By now you've heard — if you're a retiree, or about to be — that you're getting a cost-of-living adjustment in 2012.

The 3.6 percent increase is the first raise since 2009, following two years of mostly flat inflation.

David Snell, the director of retirement benefits at the National Active and Retired Federal Employees Association, joined the Federal Drive with Tom Temin and Amy Morris to discuss how the COLA bump affects feds differently.

Federal employees who retired under the Civil Service Retirement System, which was phased out in 1984 — receive the full COLA. However, retirees under the newer Federal Employees Retirement System will receive 1 percent less than the full amount, under an OPM formula for calculating feds' COLAs.

It turns out, since 1975 there have only been two years the Social Security Administration hasn't given a cost-of-living increase — the last two.

In the 1980s, Congress delayed and even rescinded some adjustments. However, in recent memory, COLA increase have become dependable.

"For a while now, COLA's have been pretty steady, because inflation has been pretty steady," Snell said.

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