[vc_row][vc_column width=”2/3″ el_class=”section section1″][vc_column_text]There are a lot of numbers being thrown around as of late for current and former federal employees. Currently, there are a few numbers they can rely on to be sure, and others–not so much in regards to how much money they will be expecting to receive and spend for the upcoming year.
The COLA (cost of living adjustment) has been announced, which will be 1.6% and will appear starting January of 2020. The cost of living adjustment is implemented every year to keep up with rising living expenses and inflation.
The Federal Employees Health Benefits Program will be raising premiums by 5.2% starting next year. This will affect most federal workers and retirees as a majority of them are on this program.
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These numbers can definitely start a headache, but these will be important for those in the federal employee or retiree system.
The settled cost of adjustment increase for those in retirement is based on the measurements done by the Labor Departments’ Bureau of Labor Statistics. Many U.S. citizens are affected by these increases because the COLA also takes effect on those receiving Social Security benefits, which are about 1 out of 6 Americans at this time. Though people may be happy to receive a higher number in their payments, this generally means that the cost of living is going up.
Though President Trump proposed a 2.6% raise, this was the opposite of what he was saying previously in the year. He had stated that there should be a freeze in federal pay raises, and instead proposed the idea to give raises that were based on merit and the individual’s performance. After the House agreed on a 3.1% increase, the President then proposed the 2.6% rate.
Federal employees saw a combined increase of 1.6% locality adjustment and pay raise for 2019. Those that are under the current FERS (Federal Employees Retirement System) received a 2% adjustment. For those that are under the older program, the CSRS (Civil Service Retirement System) received a 2.9% adjustment, as they do not receive other benefits such as Social Security or a standard federal contribution like those under the current system.
However, for next year, the cost of living adjustment of 1.6% will be the same for retirees on either system.
The news of the FEHBP premium increase of 5.2% is quite unwelcome for its members. Especially since it is a big jump from what the increase was this year at 1.3%. However, inflation in the medical industry has generally been higher than in other industries.
For those that wish to change their health package or to look for a cheaper plan will have the opportunity to do so around the middle of November to the beginning of December. The health plans that are offered are either around the same amount or are lowering their rates, which can save members money if they choose to look for another plan.[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_single_image image=”35868″ img_size=”292×285″ style=”vc_box_shadow”][/vc_column][/vc_row]