COLA For Retirees/Pay Raise for Postals!

Tuesday - 3/22/2011, 4:00am EDT

Despite the gloom-and-doom outlook for feds, most of it generated by congressional action or what Congress may, or may not do, there is a silver lining out there. For some.

While pay is frozen for most white collar federal employees, two major components of the federal family - retirees and rank-and-file postal workers - are looking at modest increases coming up.

On the downside, thousands of jobs in the government's two largest agencies will be trimmed this year.

First the good news.

Retirees: This is the second year in a row that federal, military and Social Security retirees did not get a COLA (cost of living adjustment). But if oil and food prices continue to rise the retirees are almost certain to get an inflation-catch up in January, 2012.

COLAs are determined by the rise in inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Employees. In shorthand, the CPI-W. Retirees get an automatic inflation adjustment (COLA) based on the rise in the CPI-W from the current third quarter of the year (July, August, September) over the previous year CPI-W. There were no COLAs in 2010 or 2011 because inflation was flat, and there were several months when the CPI-W dropped because of deflation. (Benefits paid to retirees go up with the CPI-W but they do not drop because of deflation).

The CPI-W increased by 0.5 percent in February and that moved the magic figure, which would determine the rise in the 2012 COLA, to 0.95 percent. And that's where the January, 2012 COLA stands. If living costs rise, as most people expect (can you say Libya?) so will the amount of the January COLA. We won't know the final amount until early October. Meantime, if you want to checkout the process, click here.

Postal Workers: Clerks and other workers represented by the American Postal Workers Union will be getting a 3.5 percent raise, spread over the life of their new, no-layoffs contract with the US Postal Service. Roughly 200,000 workers will get a 1 percent increase in November 2012, a 1.5 percent raise in November 2013, and another 1 percent in November 2014. Workers will continue to get separate cost of living raises starting in March 2013. For details, check here.

Now the downside.

Postal Service: The Federal Times on March 9 reported that the USPS will will eliminate 7,500 supervisors, managers and postmasters, and plans to eliminate 30,000 positions this year. Federal News Radio listeners got the first alert from the Federal Times news team, two weeks ago on our Your Turn with Mike Causey radio show. Despite a wide-spread rumor making the rounds, courtesy of the internet, the USPS is NOT giving employees credit-toward-retirement of an additional 5 years.

Defense Downsizing: Thousands of Defense civilian and contractor jobs will be eliminated, according to the Federal Times Pentagon team. This includes senior executive positions. Defense does have authority to offer career employees buyouts worth up to $25,000 before deductions. For more, click here.

Look for lots more trimming and rebalancing announcements impacting other government operations over the next several weeks.

You can expect lots more.

To reach me: mcausey@federalnewsradio.com


Nearly Useless Factoid
by Suzanne Kubota

So if you get stepped on by an elephant in the dark, you might be able to tell which kind it was just by the toenail marks left behind. According to the Elephant Information Repository on the web: "it is generally accepted that the African elephant has four toenails on the front feet and three on the back as opposed to the Asian elephants which have five on on the front and four on the back." But you should note, "there has been some disagreement among particular experts and there appears to be a possible range within each species for the number of toenails." Plus there's the issue of both having four toenails.

MORE FROM FEDERAL NEWS RADIO

Tips for investing in TSP's L Fund
Learn some best practices about the L Fund from Tom Trabucco of the Federal Retirement Thrift Investment Board.

Bill would cut federal pensions
A bill proposed in the Senate would end the defined benefits pension portion of Federal Employee Retirement System (FERS) for new hires starting in 2013.