A Bill to Standardize Federal Retiree Cost of Living Raises, and More

A group of five Democratic senators on Monday introduced legislation that would standardize the annual increase in annuity payments that retired federal workers receive across retirement systems.

The Equal COLA Act (S. 4221), introduced by Sen. Alex Padilla, D-Calif., would ensure that federal retirees in the Federal Employee Retirement System and the Civil Service Retirement System both receive the same annual percentage cost of living increase each year.

Currently, under rules that date back to 1986, the CSRS calculates cost of living adjustments based on the annual change in the third quarter consumer price index for workers. But FERS COLAs are based on an extrapolation from that adjustment: if the CSRS sees an increase of under 2%, FERS retirees will receive the full COLA. If the adjustment is between 2% and 3%, FERS enrollees would only receive a 2% increase. And if the CSRS COLA is 3% or more, FERS retirees would receive that adjustment, minus 1 percentage point.

For instance, this year, CSRS retirees received a 5.9% boost to their defined benefit annuity payments as inflation ramped up. But FERS enrollees only saw a 4.9% increase.

Padilla’s bill, which mirrors similar legislation introduced by Rep. Gerry Connolly in the House last year, would tie both systems’ annual increase directly to the CPI-W. Although the issue has long been a priority for federal employee groups, it has received renewed urgency amid the record-high inflation over the last year—this year’s COLA is the highest since 1982.

In a statement, National Active and Retired Federal Employees Association President Ken Thomas endorsed the legislation.

“Due to an inherently unfair policy, Federal Employee Retirement System retirees do not receive a full cost-of-living adjustment when consumer prices increase by more than 2%,” Thomas said. “That’s a departure from how COLAs are determined for both Civil Service Retirement System retirees and Social Security beneficiaries . . . This policy, enacted in the 1980s with the creation of FERS, fails to fully protect the earned value of FERS annuities, which decrease in real value in times of high inflation—exactly what COLAs are intended to prevent.”

OPM Highlights Mental Health Resources

The Office of Personnel Management on Wednesday urged federal agencies to ensure their employees are aware and can access the mental health benefits provided to federal workers, in light of May being Mental Health Awareness Month.

In a memo to agency heads, OPM Director Kiran Ahuja noted that promoting the federal workforce’s wellbeing, including mental health, is a priority in President Biden’s management agenda.

“We want to make sure that all federal employees understand the supports available to them and underscore that there should be no shame or stigma for taking care of their mental health,” Ahuja wrote. “[As] a reminder, employee assistance programs and Federal Employees Health Benefits health plans offer mental health services to employees and their family members. We encourage agencies to proactively communicate to their workforces about their options and encourage employees to contact their agency benefits officers or EAP coordinator to learn more.”

Ahuja also stressed that agencies need to make sure federal employees are not dissuaded from taking advantage of mental health care benefits out of fear of jeopardizing their positions or security clearances.

“Agency human resource and personnel vetting offices (security, suitability and credentialling) are important partners in dispelling the myth that seeking mental health treatment will disqualify applicants or employees from working for the government or passing a background check,” she wrote. “Everyday individuals with mental health conditions carry out their duties without presenting a security risk. We encourage proactive management of mental health conditions to support the wellness and recovery of federal employees and others.”