Equal COLA Act

The Equal COLA Act would change how cost-of-living adjustments (COLAs) are calculated for federal employees under the Federal Employees Retirement System (FERS). Currently, FERS retirees receive reduced COLAs when inflation exceeds 2 percent, unlike Social Security recipients and employees under the older Civil Service Retirement System (CSRS). For example, when inflation is between 2 and 3 percent, FERS retirees receive only a 2 percent increase, and when inflation exceeds 3 percent, they receive the inflation rate minus 1 percentage point. If enacted, this bill would remove those caps so FERS retirees receive the same full inflation-based adjustments as CSRS retirees and Social Security recipients. The bill would not change the age at which FERS retirees become eligible for COLAs, which remains age 62 under current law. The measure would increase federal spending on retirement benefits and agency contributions to the federal retirement trust fund to the extent that inflation exceeds current FERS COLA caps.