COLA? Maybe. Pay raise? Maybe not!

Monday - 8/5/2013, 2:00am EDT

When it comes to federal workers vs. federal retirees, all men (and women) may have been created equally but, in reality, the treatment is very different. Starting with money.

Federal workers, for example, get pay raises based on fiscal considerations and, more often than not, politics. That is, when they get them!

Once retired, however, federal workers (like military retirees and people who get Social Security) are under an automatic pilot plan. They get cost-of-living adjustments (COLAs) designed to keep pace with inflation. In the private-sector, pensions (much less inflation-adjusted pensions) are as rare as passenger pigeons.

Thanks to a three-year pay freeze, higher taxes and rising health insurance premiums, take-home pay for most nonpostal federal workers has been shrinking every year. The White House originally proposed a two-year freeze which Congress happily extended to three. But for federal retirees, it is a very different story.

Pay raises are dependent on Congress and the White House. But benefits for federal and military retirees, and people who get Social Security, are linked to inflation. And although inflation has been low — largely due to the recession — retirees got a 1.7 percent raise in January 2013. And another may be in order for 2014.

With a couple of months left in the countdown, federal-military-Social Security retirees are looking at a potential cost-of-living adjustment of 1.3 percent in January 2014. It could be more if the Consumer Price Index increases during this third quarter, which ends in September.

While a COLA of 1.3 percent isn't enough for that dream vacation, it is better than standing still as working feds have done for the past several years. And may continue to do in the future.

It is entirely possible that federal white collar workers may be in for another year of frozen pay. It is highly unlikely (because they are linked to Social Security recipients) that any COLA due retirees will be scuttled by politicians. But the amount of the January 2014 COLA is still to be determined via a complex formula. This is how the National Active and Retired Federal Employees explains it:

"Relevant to the cost-of-living-adjustment to civil service annuities for 2014, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased by 0.3 percent in June.

"As determined in October, federal retirees received a 1.7 percent cost-of-living adjustment (COLA) to their civil service annuities beginning in January 2013, the same increase for Social Security benefits and military retirement annuities.

"The new CPI-W figure for June 2013 was 230.002, 1.35 percent higher than the average CPI-W for the third-quarter of 2012, which was 226.936. The 2012 third-quarter average is the reference figure for determining the 2014 COLA.

"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. The CPI-W is the current index used for measuring increases in the prices of consumer goods throughout the economy. It includes prices on all consumer goods, including food and beverages, housing, clothing, transportation, medical care, recreation, education, communication, and more."

So, for retirees, any January 2014 COLA depends on the inflation rate for July, August and September of this year.

For federal workers, the likelihood of a pay raise depends on politics and, maybe, prayer.


NEARLY USELESS FACTOID

Compiled by Jack Moore

It seems like everything is getting more expensive these days — and that includes crime fighting. The price of being Batman in 1939 (when the superhero was created) was $10,253. That includes $5,600 for the Batcave as well as $600 for the Batmobile, according to the website Laughing Squid. In 2013, Batman's costs rose to more than $134 million.


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