Federal News Radio reports that the Social Security Administration has confirmed that retirees will receive a 3.6% cost of living adjustment in January. The COLA also applies to federal pensioners:
Federal retirees under the old Civil Service Retirement System receive the full COLA amount.
However, there is a slightly different system for retirees under the Federal Employees Retirement System. If the COLA is more than 3 percent, FERS retirees will receive 1 percent less than the general increase. If the COLA is between 2 percent and 3 percent, FERS retirees receive just a 2 percent increase.
For example, with a COLA of 3.6 percent, FERS retirees can expect to receive a 2.6 percent increase.
However, most FERS retirees will not have the COLA applied to their annuity until age 62.
via Social Security announces 3.6 percent COLA – FederalNewsRadio.com.
To hear right wing pundits talk, you’d think the federal pension system was about to destroy America. That’s why millionaire politicians like Darrell Issa want to eliminate pensions for middle class working people (while clinging to their own more lucrative taxpayer financed retirement plans).
A recent Federal Times article discusses the “problem” in some detail, and comes to a surprising conclusion: there isn’t a problem!
But there’s no evidence to suggest federal pension plans are a financial bomb waiting to go off. That was defused when CSRS was ended, and since FERS is legally required to be fully funded, the unfunded liability will fade over time.
OPM and outside observers such as Adcock and Palguta aren’t the only ones saying the system is sound. The Congressional Research Service has published several reports in recent years on federal pension programs, all of which concluded the programs are on solid ground.
"Although the civil service trust fund has an unfunded liability, it is not in danger of becoming insolvent," CRS said in a January report.
Audit firm KPMG has consistently given OPM’s financial statements and retirement programs unqualified opinions, meaning they found no significant problems.
And the Government Accountability Office said in a 1995 report that CSRS’ flaws, which resulted in the unfunded liability, were resolved with the creation of FERS.
"Provisions have been made for the retirement fund to always have sufficient budget authority to cover future benefit payments," former Assistant Comptroller General Johnny Finch said at a House hearing.
via Fed pensions underfunded by $673B – FederalTimes.com.