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COLA Projection for 2017?
Posted On: Oct 03, 2016

COLA Projection for 2017?

(This article first appeared in the September-October 2016 issue of The American Postal Worker magazine.)

As we go to press it is too early to know if retirees will receive a cost-of-living adjustment (COLA) increase in 2017.

The Social Security Board of Trustees will announce the 2017 COLA in October, and an update will be posted at as soon as possible after the announcement is made. Current projections range from no adjustment to 0.2 percent increase.

According to many experts, increases in retirees’ cost of living are understated. That’s because COLAs are based on CPI-W, the Consumer Price Index for Urban Wage Earners and Clerical Workers, which measures the spending of families who make most of their income from wage earners. It excludes families whose main sources of income are pensions and Social Security.

Retirees have different spending habits than people who are still working. Most notably, they tend to spend more on health care, where costs generally increase much faster than the overall inflation rate. That’s why the APWU has fought along with the Alliance for Retired Americans and others to change the formula for retiree COLAs from the CPI-W to the CPI-E (Consumer Price Index for the Elderly).

Medicare Integration

A House committee approved the Postal Service Reform Act of 2016 (H.R. 5714) in July. The bill addresses the pre-funding requirement of the Postal Accountability and Enhancement Act of 2006 (PAEA), which has virtually destroyed USPS finances, through “Medicare Integration.” President Dimondstein shared his opinion of the bill, as well as what needs to be changed in order for APWU to support it, during a conference call with the local and state retiree chapter leaders.

What’s good about the bill? Medicare Integration would establish a postal-specific health plan, which would remain part of the Federal Employees Health Benefits program (FEHB). Other good features are that the Medicare integration provision is part of comprehensive postal reform, not a stand-alone measure; the penalty for late enrollment in Medicare Part B would be waived; and a Medicare Education Program would be established. The union is monitoring the provisions to ensure there are no negative effects, especially as they relate to Medicare Part D.

There is much more to H.R. 5714 than Medicare Integration and reducing the Postal Service’s pre-funding obligations of the PAEA, however. The bill also would convert door delivery to curb-side delivery or cluster boxes, which would represent a major reduction in service. The legislation also fails to address needed changes in postage ratemaking.

New Union Contract

When President Dimondstein announced the details of our new Collective Bargaining Agreement (CBA) on July 8, many retirees asked, “What’s in it for me?”

Of course, the contractual changes in wages, cost-of-living adjustments and health insurance premiums don’t affect retirees, with one exception: Those who retired on or after Nov. 14, 2015, are entitled to retroactive pay for the period from Nov. 14, 2015, until the effective date of their retirement.

Other changes will benefit retirees. The Peak Season Memorandum of Understanding (MOU) permits the Postal Service to re-employ retirees for up to six weeks during the holiday season, without any adverse impact on their annuity. These re-employed workers will be paid at the current hourly rate of Level 6 Postal Support Employees, $16.06 per hour.

Another contractual improvement that will benefit some retirees addresses collection procedures for post-separation Letters of Indebtedness. The new provision requires management to advise employees of their right to file a grievance within 14 days of receipt of the Letter of Indebtedness or petition through the Debt Collection Act. It also stipulates that if a timely grievance or petition is filed, management must delay collection of the debt until the matter is adjudicated.

Election 2016

Sisters and brothers, this bears repeating until everyone does their part: On Nov. 8, 2016, we must show up and make sure that Hillary Clinton is elected President of the United States. We can’t just stop with Hillary, we must also elect officials up and down the ballot who will address and support issues of importance to retirees and our families

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