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So we just need to keep on building support getting more people to contact their members of Congress about it, and then we might have some success, you know, getting it through. And cosponsors keep on going up each Congress, but it is a little bit of an uphill fight for this Congress are in the short term. You know, this is the first time the Senate has introduced the bill, the Equal COLA Act has been around in the house, but they introduced it in the Senate. So we’re almost half and half of FERS and CSRS, so more people are affected by this. The other thing is that, you know, there’s a lot more FERS retirees, we’re coming up to close to, or more than a million FERS retirees based on the last statistical report that OPM put out. So this is more of an issue that’s present. John Hatton: You know, I think it’s an uphill battle. What are you hearing, if anything from the Hill that would give you hope that this is the year? This is not the first year it’s been introduced. Jared Serbu: And this legislation has been around before. So it’s just whatever that change in the consumer price index that the Bureau of Labor Statistics looks at from one year to the next is, that’s what the cost of living adjustment be, would be, and there would be no reduction. John Hatton: It would just provide, it’s very simple, it would just provide, you know, the COLA, cost of living adjustment that’s based on the change in consumer prices, the exact way Social Security is provided, the exact way Civil Service Retirement System annuities are provided. Jared Serbu: And what would the, what would the legislation we’re talking about here actually do? We’re going to reduce that number down by 1%. So I don’t think there’s a really good explanation for it other than they probably had to make the numbers work. So they had to tweak some numbers and move some numbers around. So if you take, you know, the first pension, and you add in Social Security, and you add in your TSP at a certain level, it was supposed to provide a similar payout overall, like in the aggregate to CSRS. John Hatton: Yeah, it was all part of a balance, you know, they tried to when they switched over to FERS and created FERS they tried to make it actuarially similar to CSRS. Just out of curiosity, do you happen to know if there’s any particular policy rationale behind that one point reduction back when Congress first came up with it? Or was it just straight up deficit reduction? So it’s just a 1% reduction when inflation is high.
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But a good example is last year and 2020, CSRS and Social Security got a 5.9% COLA, FERS got 4.9%. Except for him that two to three range is just 2%.
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#RETIREMENT COUNTDOWN FULL#
The second is, when it’s, when inflation is above 2%, you’re not getting the full COLA. And then unless you’re in a special category, that you can call, it doesn’t address that particular issue. John Hatton: OK, well, there’s a couple issues first, you don’t get them until you’re age 62. Jared Serbu: John, I think the right place to start off here is remind us how FERS COLAs actually work right now under current law. To talk more about it, the Federal Drive was joined by John Hatton, Vice President for Policy and Programs at NARFE. The National Active and Retired Federal Employees Association (NARFE) is urging Congress to pass the Equal COLA Act, which would get rid of the disparity between CSRS and FERS COLAs. That hasn’t been a big deal over the past decade of low inflation, but obviously circumstances have changed. CSRS and Social Security beneficiaries get COLAs that match inflation FERS retirees get a smaller adjustment. When Congress created the Federal Employee Retirement System in the ‘80s, one of the most notable changes was that future retirees would get smaller cost of living adjustments than participants in the old Civil Service Retirement System. Subscribe to Federal Drive’s daily audio interviews on Apple Podcasts or PodcastOne. That hasn’t been a.īest listening experience is on Chrome, Firefox or Safari.
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Subscribe to Federal Drive’s daily audio interviews on Apple Podcasts or PodcastOne. Best listening experience is on Chrome, Firefox or Safari.