Federal Daily - January 28, 2010
It’s Official—COLAs Do Little to Increase Prosperity of Retirees
While it may not be news to federal annuitants, a new report says that the annual cost-of-living adjustments retired feds receive do little to increase their prosperity, but instead simply act as a financial hedge against bad times.
In a Jan. 20 Congressional Research Service report—posted on the Open CRS Web site—analysts looked at COLAs as part of a broader examination of federal pay and retiree benefits.
COLA increases, the report said, do not make retirees better off because of the way the increases are calculated. Increases in the salaries of current federal employees differ from COLAs for retired federal employees because they are based on different economic variables, the report said. Pay for civilian feds is indexed to wage and salary increases in the private sector, as measured by the Employment Cost Index. But federal retirement and disability benefits are indexed to price increases as measured by the Consumer Price Index (CPI).
Moreover, wage increases generally reflect both improvements in the productivity of labor and increases in the general level of prices in the economy. Consequently, when measured over long periods of time, private-sector wages (on which active feds’ pay is based) tend to rise faster than prices (on which retirees’ COLAs are based), the report said.
Plus, the rationale for the COLA model is different. Congress linked COLAs for federal employee pensions to the rate of increase in the general level of prices to protect retirement income from losing purchasing power through the effects of price inflation. COLAs ensure that a retiree’s income will purchase the same amount of goods and services after years of retirement that it purchased at the start of retirement. However, since COLAs do not reflect increases in the productivity of people who are still in the workforce, they do not increase the real purchasing power of retirement income.
“COLAs do not make retirees better off financially,” the report said, “they merely protect them from becoming financially worse-off over time as prices rise.”
To see more, go to: http://opencrs.com/document/94-971/
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TRICARE Pushes Web-based Mental Health Counseling
As part of its effort to expand the use of behavioral health care services, TRICARE this week reminded attendees that servicemembers, spouses and family members who have a computer and a Webcam can make use of Web-based behavioral health counseling services.
Speaking at the 2010 Military Health System Conference on Jan. 25, Rear Adm. Elizabeth Niemyer, director of TRICARE Regional Office West, noted that the TRICARE Assistance Program allows beneficiaries to speak privately with a licensed counselor over the Internet at any time. If TRIAP counseling suggests that more specialized care is required, the beneficiary will be referred to a behavioral health provider, Niemyer said.
TRIAP was launched last August and is patterned after civilian employee assistance programs. Sessions are unlimited, allowing beneficiaries to access it as many times as they need to, Niemyer said. Most of those who have used the service so far have sought counseling for relationship issues and stress, she said.
With the demand for mental health assistance steadily increasing as a result of deployments to Iraq and Afghanistan, the constant stress on troops and families has made behavioral health care a matter of key concern to military health officials. Niemyer said.
To see more, go to: www.health.mil/Press/Release.aspx?ID=1132.
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FLRA to Hold Arbitration Focus Groups
The Federal Labor Relations Authority will be conducting three focus groups next month in Washington, D.C., to seek the opinions of the federal labor-management community on ways to improve the grievance arbitration process.
In a Jan. 25 announcement, FLRA said it wanted input from federal agencies and union representatives, as well as from arbitrators who conduct hearings and issue awards resolving grievances in the federal sector. All focus groups will be held at the FLRA in Washington.
FLRA said the focus groups are part of its larger effort to reach out to the federal labor-management community during February for ideas and views on the grievance arbitration process, procedures and regulations, and suggestions for training. FLRA is receiving comments via email at the authority’s “Engage the FLRA” address: engagetheflra@flra.gov.
To see more, go to: www.flra.gov/webfm_send/210.
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