Federal Employees: Pension COLAs and Pay Adjustments Since 1969 (CRS Report for Congress)
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| Release Date |
Revised Dec. 7, 2010 |
| Report Number |
94-971 |
| Authors |
Patrick Purcell, Domestic Social Policy Division |
| Source Agency |
Congressional Research Service |
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Summary:
Under the terms of the Federal Employees' Pay Comparability Act of 1990 (P.L.101-509), pay for civilian federal employees is adjusted each year to keep the salariesof federal workers competitive with comparable occupations in the private sector.The annual increases in federal employee pay are based on changes in the cashcompensation paid to workers in the private sector, as measured by the EmploymentCost Index (ECI). Under certain circumstances, the President may limit the annualincrease in federal pay by executive order. Federal law also requires Social Securitybenefits and the pensions paid to retired federal employees to be adjusted each year.The cost-of-living adjustments (COLAs) both for Social Security and civil servicepensions are based on the rate of inflation as measured by the Consumer Price Index(CPI). Table 1 shows the pay increases since 1969 for federal employees andMembers of Congress and COLAs made to Social Security benefits and federal civilservice pensions.1Two national economic indexes also are displayed in Table 1 to provide a basisfor comparison with the benefit and pay increases. These are the average annualchange in the wages of all workers in the United States, as computed by the SocialSecurity Administration, and the Consumer Price Index for Urban Wage Earners(CPI-W), a price index computed by the U.S. Bureau of Labor Statistics.
