Chain COLA

Chain COLA is a new system to measure and set inflation-triggered cost of living adjustments for retirees.

Currently those January COLA adjustments are tied to the consumer price index (CPI). Although retirees have not had a COLA in two years, critics say the CPI system overestimates inflation. They argue that using a different yardstick would take into account spending adjustments people make in hard times (like now) and produce a truer estimate of costs. Bottom line, going to the chained COLA would reduce, by some estimates, future inflation-adjustments by half a percentage point, or more. Net effect would be smaller raises in future for federal, military retirees and people who get Social Security benefits. Reducing Social Security increases even a small amount each year would rack up billions of dollars in future savings. Estimated saving over 20 years is $100 billion.

2012 COLA

August 19, 2011

by Mike Causey

Although federal workers face at least one more year without a pay raise, government retirees are cautiously looking forward to a cost of living adjustment of around 3.3 percent in their January checks. That COLA, if it holds up, would be the first inflation-catchup federal, military and Social Security retirees have had since they got a 5.8 percent increase in 2009.( SORRY BUT I NEVER RECEIVED A 5.8 COLA)

The actual amount of the 2012 COLA won't be known until mid-September. The raise could be higher if inflation creeps up this month and in September. It would be less if living costs drop between now and the end of September.

By law, retirees are supposed to get COLAs to match the rise in inflation as measured by the Bureau of Labor Statics Consumer Price Index. But for the past few years, inflation has been flat and there were actually months when living costs dropped. Result: No retiree COLA in 2010 or 2011. That(No retiree COLA) despite the fact that health insurance premiums for retirees (and workers) have been going up. And up.

In recent months, there has been back-and-forth inflation. The January COLAs for retirees are based on the rise (if any) of the CPI from the third quarter of the previous year to its level for the current year. The third quarter measuring period is July, August and September. So that means there are still two months (August and September) left in the countdown.

Courtesy of Lorraine Rumore, Research Chair.

DON'T SINGLE ME OUT!

You should be concerned about the following possible actions in the near future.

1. Your civil service retirement fund and your Thrift Savings Plan might be in trouble because we, as a government, have borrowed so much money from China.

2. What about that so-called Diet COLA plan to reduce future cost of living adjustments for CSRS retirees to one percentage point less than inflation?

3. Have you heard about the cost-cutter proposal to change the way the government measures inflation that would dramatically increase each year the percentage of health premiums paid by active and retired workers?

What can you do?

click on:

http://www.narfe.org/heartbeat/

and either send the prepared message provided for you by NARFE , or write your own message!

Another solution is to call or Representative and Senators.

CONTACTING CONGRESS

Reaching policymakers in Washington is easy and only takes a few minutes. Even if you’ve never called Congress before, now is the time. Use the toll free numbers and follow the simple instructions below:

Step 1: Dial 1-866-220-0044 for the Capitol. Ask the operator to connect you to your Senator’s office or Representatives office or supply your ZIP Code.

Step 2: Tell the staff person who answers the telephone next where you live so they know you are a constituent, then say:

 I am a retired federal employee who [tell the staff person a little about your work].

 I am calling because I want to voice my opposition to any attempt to shift the cost of the Federal Employees Health Benefit Program onto employees and retirees.

 An increase in FEHBP contribution would squeeze millions of middle-class federal retirees like me – most of whom are on a fixed income – forcing seniors to choose between healthcare premiums and groceries and gas.

 I also oppose any mandatory increase in the amount that federal employees must contribute to their retirement fund, which is nothing more than a 5% tax on 2.2 million middle-class families.

 Current federal workers continue to be paid less than their private sector counter-parts.

 We have served our country proudly and shouldn’t be unfairly singled out to bear the burden of fixing a budget problem we didn’t create.

Step 3: Call 1-866-220-0044 again to reach the Capitol to deliver the same message to your other senator and your representative.

Step 4: The toll free number for the White House is 1-888-225-8418 Call from 9am to 5pm EDT. You can make four effective phone calls (one representative, two senators and the President) in only about 10 minutes!

Every new proposal to tax or slash the federal workforce is a threat to every active and retired federal worker. Washington is making it clear that they think our annuities are too generous – and that they think we can be easily singled out.

The Check is in the Mail!

NARFE Applauds President for Including Federal Retirees in Proposal to Offer $250 to Older Americans in No COLA Year; Association’s Behind-the Scenes Work Pays Off

Margaret L. Baptiste, president of the National Active and Retired Federal Employees Association (NARFE), today praised President Obama for proposing that all federal retirees and survivors -- including Civil Service Retirement System (CSRS) annuitants who are not eligible to receive Social Security – should be offered a one-time $250 payment, just like other older Americans. NARFE has worked with key congressional committees since July to ensure that such federal government retirees and survivors would receive equivalent compensation.

The proposal was made in advance of the Bureau of Labor Statistics’ October 15 announcement confirming that negative inflation during the past 12 months would result in no cost-of-living adjustment (COLA) for Social Security and federal civilian and military retirees in 2010.

“This payment would come as a welcome relief to federal retirees and survivors at a time when most will shoulder a 12 to 15 percent health insurance premium increase in a year they will receive no cost-of-living adjustment,” said NARFE President Baptiste. “We commend the president for supporting a payment to older Americans that will help them make ends meet and for including government retirees who are not eligible to receive Social Security. With the boost from the president, NARFE will continue to lead the effort in Congress to pass this needed legislation.”

Over a million federal, state and local government employees who are not eligible to receive Social Security are sometimes not part of such relief proposals. For example, until NARFE and other public employee organizations intervened, government retirees not entitled to Social Security were left out of a similar payment in the Stimulus bill approved by Congress in February 2009.

Federal retirees who were hired by the government before December 31, 1983, did not pay Social Security payroll taxes and are not covered by Social Security unless they worked 40 or more quarters in other Social Security-covered employment.[1] Congress chose not to include government workers in Social Security when the program was first created in 1935 because most public employees already had employer sponsored retirement benefits. Indeed, a CSRS annuity was intended to equal a private-sector pension plus Social Security benefits.

In addition to the president, Baptiste applauded Sen. Harry Reid, D-NV; Max Baucus, D-MT; Bernie Sanders, D-VT; and Blanche Lincoln, D-AK; and Reps. Nancy Pelosi, D-CA; Charles Rangel, D-NY; Carolyn McCarthy, D-NY; and Peter DeFazio, D-OR for their support of this needed relief. She urged Congress to approve the proposal as soon as possible.

October 16, 2009 Dan Adcock

NARFE, one of America’s oldest and largest associations, was founded in 1921 with the mission of protecting the earned rights and benefits of America’s active and retired federal workers. The largest federal employee/ retiree organization, NARFE represents the retirement interests of nearly 5 million current and future federal annuitants, spouses, and survivors.

H. R. 3631: FAIRNESS LEGISLATION

H. R. 3631

On September 24, the House passed legislation, H.R. 3631, to protect all Medicare beneficiaries from an increase in their Part B premium in 2010. In 2010, it is almost certain there will be NO cost of living adjustment (COLA) for Social Security beneficiaries and federal civilian and military retirees. NARFE worked tirelessly behind the scenes on this legislation for the past three months.

This bill is about equity for all Medicare beneficiaries, because without it, federal, state and local government retirees who are not Social Security-eligible would have to pay the Part B rate hike in a no-COLA year, while Social Security beneficiaries would not.

Under current federal law, 72 percent of Medicare beneficiaries do not have to pay for the increase in Part B premiums in any year in which they receive no Social Security COLA. However, there are four groups of older Americans who are not protected by the ‘hold harmless’ provision, including over a million federal, state and local government retirees who are not eligible to receive Social Security benefits. Absent a change in law, they would not only have to pay the higher Part B premiums without a COLA, but also absorb the costs of other Medicare beneficiaries currently ‘held harmless.’

Congressman Mica voted for this Bill. We thank our NARFE legislative officers and Congressman Mica for their efforts in passing H.R.3631.

SOCIAL SECURITY

The Social Security Trustees have estimated that there will be no COLA increases for the next two years. Their estimate is based on the assumption that there will be no increase in the cost of living or inflation mostly because the cost of oil is less than 2008. This prediction will affect our Annuity as well.

***A posting on August 18, 2009 in our Chapter Blog : http://narfenewsletter.blogspot.com/

JULY INFLATION DECLINES 0.2 PERCENT

Aug 18, 2009

For purposes of calculating the next COLA (cost-of-living adjustment) the index is currently 2.3 percent below the 2008 third quarter average base index of 215.5. August consumer prices indices will be released on September 16, 2009…..

In spite of what the experts may say in Washington, locally the cost of electricity will be increasing which is our major source of energy. Gasoline might be less this year than two years ago, but it is on the rise. We will see an increase in our property taxes, plus the cost of trash pick up just went $132 to $197per year.

Our Health Care will surely increase for the year. Our Insurance premiums that we pay after taxes will increase again; plus the cost of Medicare Part B and Part D have increases in the works. Thankfully Part B premiums have a cap on them. Part B (coverage for doctor visits) can not increase more than the increase in the COLA which will be zero for the next two years. Therefore; we are somewhat protected on Part B. Part D (coverage for Drugs) has no cap. Again we as a group are lucky, if we followed the advice of NARFE by not signing up for Part D.

In the end what is the result? You and I lose. We will have much less money to work with next year and most likely the year after. We lose on the COLA; cost of energy, medical care, Property taxes, trash pick up and most things that were “out sourced”. We won on Medicare Part B and if we follow advice of NARFE on Part D. The losses seem to our weigh the small gains.

CECE DOUGHERTY said...

YOU PAINT A GLOOMY PICTURE AND iT'S TRUE WE WILL ALL HAVE TO ECONOMIZE, HOWEVER, WE MUST ALSO COUNT OUR BLESSINGS. DUE TO OUR AGE, WE PROBABLY HAVE A MORTGAGE-FREE HOME. WE HAVE THE BEST MEDICAL COVERAGE SO WE HAVEN'T GONE BANKRUPT AND WE DON'T HAVE TO WORRY ABOUT LOSING OUR JOBS. WE HAVE TO PRAY CONDITIONS DON'T GET WORSE. WE WILL ALL SURVIVE.