Equal COLA Act

The Equal COLA Act would change how cost-of-living adjustments (COLA) are calculated for federal employees who receive retirement annuities under the Federal Employees Retirement System. Currently, federal law limits these adjustments based on inflation rates: if inflation rises 2% or less, retirees receive the full amount; if it rises between 2% and 3%, the adjustment is capped at 2%; and if inflation exceeds 3%, the adjustment is limited to 1% less than the actual inflation rate. This bill would remove these caps and allow retirees to receive adjustments equal to the actual inflation rate, regardless of how high inflation climbs.

For federal retirees, this change would mean their retirement income would keep pace more fully with rising prices during periods of high inflation. For example, if inflation reached 5%, retirees would receive a 5% adjustment to their annuities rather than the current 4% cap. This could provide meaningful financial relief to retired federal workers during inflationary periods, helping preserve their purchasing power.

The bill has passed the House and now requires approval from the Senate before it could become law. If enacted, the changes would apply to future cost-of-living adjustments for federal retirees, though the specific effective date would depend on how the legislation is finalized.