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No COLA in 2010, officials confirm

Federal retirees will see no cost-of-living adjustment in their pensions next year, the government said today.

Prices for consumer goods — the benchmark used to determine the annual COLA — failed to increase this year, meaning there will be no increases in checks for retirees in either the Federal Employees Retirement System or the Civil Service Retirement System.

Retirement checks this year increased 5.8 percent for CSRS retirees and 4.8 percent for FERS retirees, the largest increase since 1982. The increase was due largely to higher gas prices, which have since fallen due to the weak economy.

Social Security benefits, which are provided to FERS retirees, also will remain stagnant next year. It will be the first year without an automatic cost-of-living adjustment in Social Security checks since COLAs were established in 1975, the Social Security Administration said.

President Barack Obama on Wednesday called on Congress to provide a one-time payment of $250 to all 57 million Americans who receive Social Security and Supplemental Security Income benefits. This would be in addition to the $250 payment Social Security recipients received earlier this year through the Recovery Act. The additional payment would amount to a 2 percent increase in benefits for the average Social Security beneficiary, the White House said.

FERS retirees, who receive Social Security as part of their federal benefits package, would be eligible for the $250 payments. CSRS retirees, unless they have Social Security earnings outside their federal employment, would not be eligible.

COLAs are based on the annual change in the Consumer Price Index for Urban Wage Earners and Clerical Workers. The index fell 2.1 percent from the third quarter of 2008 to the third quarter of 2009, according to the Bureau of Labor Statistics.