Federal legislation proposed by Democrats aims for a 4.3% average raise in federal workers' salaries by 2026, with the intention to standardize cost of living adjustments (COLAs) for retirees.
Federal Minister of Finance Christian Lindner has introduced a new law that aims to standardize the annual price index adjustments for defined benefit pension services of federal civil servants. The proposed legislation, known as the Federal Adjustment of Income Rates Act, has been reintroduced by Congressional Democrats and has garnered support from various federal employee groups.
Rep. Gerald Connolly, who reintroduced the Equal COLA Act, believes this bill will end the unjust penalty towards certain federal retirees. The Equal COLA Act seeks to correct what federal employee groups argue unfairly deflates retirees' incomes during periods of high inflation.
Under the current system, Federal Employee Retirement System (FERS) retirees receive less than Civil Service Retirement System (CSRS) retirees in certain inflation scenarios. This bill aims to rectify the unfair two-tiered process and bring parity to the federal retirement system.
The proposed pay raise consists of a 3.3% across-the-board increase in basic pay and a 1% average boost to locality pay. While this represents a significant increase from the 2.0% average raise federal workers received this month, it falls short of President Biden's previous annual pay raise proposals of 4.6% in 2023 and 5.2% in 2024.
National Treasury Employees Union National President Doreen Greenwald has endorsed the Federal Adjustment of Income Rates Act, stating that federal employees deserve the pay increase outlined in the FAIR Act. Greenwald also highlighted that last year, federal employees earned 24.72% less on average than their private sector counterparts.
The federal workforce has faced various challenges, including pay freezes, government shutdowns, and unsafe work environments during the Trump administration. The bill proposes a 4.3% average pay raise for federal workers, which, if passed, would help alleviate some of these hardships.
Schatz, a supporter of the bill, stated that federal workers play an important role in daily life and deserve pay that reflects this. Connolly, in agreement, argued that federal retirees, regardless of retirement system, should receive the same cost-of-living increase.
The Equal COLA Act also aims to correct what federal employee groups argue unfairly deflates retirees' incomes during periods of high inflation. By standardizing the cost-of-living adjustments for all federal retirees, the bill hopes to end the current system's discrepancies and provide fair compensation for the nation's federal workforce.
The Federal Adjustment of Income Rates Act seeks to set the stage for the upcoming federal pay raise debate. As the bill moves through Congress, federal employees and retirees alike await a decision that could significantly impact their livelihoods.
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