Equal COLA Act
- Sponsor
- Rep. Connolly, Gerald E. [D-VA-11]
- Committees
- Oversight and Government Reform Committee (primary)
- Last action
- Sep 16, 2025
Bottom line
The Equal COLA Act aims to provide FERS retirees with full cost-of-living adjustments, matching those received by CSRS retirees, which would increase their annuity payments and improve their purchasing power.
What it actually does
This bill amends title 5, United States Code, to eliminate the current tiered cost-of-living adjustment (COLA) calculation for annuities under the Federal Employees Retirement System (FERS). It replaces the existing formula with a full COLA equal to the annual percent change in the price index, ensuring FERS annuitants receive the same COLA as those under the Civil Service Retirement System (CSRS). The change applies to all COLAs made after the bill's enactment and to all FERS annuities, regardless of their commencing date.
Proponents argue
Supporters argue this bill rectifies a long-standing inequity where FERS retirees, who often have lower lifetime benefits compared to CSRS, receive smaller COLAs, leading to an erosion of their purchasing power over time. They contend that providing full COLAs is essential for the financial security of federal retirees, especially during periods of high inflation, and aligns with the principle of fair compensation for public service.
Opponents contend
Opponents might argue that increasing FERS COLAs would significantly increase federal spending and contribute to the national debt, potentially requiring cuts elsewhere or increased taxes. They may also contend that the FERS system was designed with a different benefit structure, including the Thrift Savings Plan, and that altering one component without considering the entire system could have unintended fiscal consequences and undermine the original actuarial assumptions.
The bill text is very short and easy to read, allowing for quick comprehension of its direct impact.
Section 2(a)
Full Cost-of-Living Adjustments for FERS Annuities
This section amends paragraph (1) of subsection (b) of section 8462 of title 5, United States Code, to remove the current tiered calculation for Federal Employees Retirement System (FERS) cost-of-living adjustments (COLAs). Under existing law, FERS COLAs can be reduced if the Consumer Price Index (CPI) increase is between 2% and 3% (receiving 2%) or above 3% (receiving CPI minus 1%). This amendment ensures that FERS annuities will be increased by the full percent change in the price index, effectively providing the same COLA formula as the Civil Service Retirement System (CSRS).
Supporters argue
Supporters argue that this provision corrects a long-standing inequity, ensuring FERS retirees, who dedicated their careers to public service, receive fair adjustments to their pensions that keep pace with inflation. They highlight that the current system disproportionately affects those on fixed incomes and that this change is vital for their economic well-being and dignity in retirement.
Critics contend
Critics might argue that this provision would significantly increase the unfunded liabilities of the FERS system and add substantial costs to the federal budget, which would ultimately be borne by taxpayers. They may also point out that FERS was designed as a three-tiered system (pension, Social Security, TSP) and that this change alters a fundamental component, potentially disrupting the system's intended balance.
Tradeoffs
The provision navigates the tension between ensuring equitable and inflation-protected benefits for federal retirees and managing the long-term fiscal sustainability and cost to taxpayers. It also addresses the perceived fairness gap in COLA calculations between FERS and CSRS retirees.