COLA Reductions Will Not be in 2015 Budget

"...President Obama will not tinker with federal retirees’ cost-of-living adjustments in his fiscal 2015 budget, which is scheduled for release in early March.

Obama proposed switching to a chained Consumer Price Index -- a formula that slows the rate of inflation growth and in turn, reduces federal retirees’ and Social Security beneficiaries’ COLAs -- in his fiscal 2014 budget. He first pitched the change during the 2012 fiscal cliff negotiations.

A move to the chained CPI is still on the table in hypothetical future budget negotiations, White House spokesman Josh Earnest said at a press briefing on Thursday, but it will not be in the president’s fiscal 2015 budget..."

Read more at GovExec.com

Could 2013 Be the Year for Pension Reform?

"...Simpson and Bowles have rolled out yet another version of their deficit reduction proposals, and federal pension reform is still in there.

The famous 2010 bipartisan fiscal commission led by former Republican Sen. Alan Simpson from Wyoming and former Clinton White House Chief of Staff Erskine Bowles last week released its latest plan, which calls for $2.5 trillion worth of spending cuts and tax increases. Like President Obama and many lawmakers, the duo thinks federal employees need to contribute more to their retirement benefits. They also favor moving to a less generous formula -- the so-called chained CPI -- to calculate retiree cost-of-living adjustments..."

Read more at GovExec.com

The Chained CPI and Federal Retirees

"...The president’s budget proposal now provides for a chained CPI...

If you are a current federal employee or a retired federal employee, you would be impacted by a chained CPI when it comes time to receive your future retirement payments. Each year, federal retirees benefit from a cost of living allowance. In most years, this results in an increase in the amount of money received by a retiree. In 2013, this current COLA calculation resulted in an increase of 1.7% for most people receiving Social Security or a CSRS pension payment.

What would the impact of this change be on a federal retiree?..."

Read more at FedSmith.com