Raises, COLAs Also Often Confused

Another point of confusion that arises regularly when the federal raise is in the news is the difference between raises and cost-of-living adjustments. Raises are for active employees and COLAs are for retirees. While the two amounts often roughly parallel each other, one does not directly affect the other and they are determined through entirely different processes. Raises for the following year are set in the annual budget process. COLAs are set according to an inflation measure that starts each October and ends the following September and are paid automatically the following January–except in the rare cases when legislation is enacted to delay, deny or reduce the COLAs. So far retirees have accumulated 2.8 percent toward their COLA. However, some confusion regarding the two continues to arise, in part because some employees (and higher government officials, including some members of Congress) call their raises COLAs while some retirees call their COLAs raises. Another complication has been the White House