The Carte, administration wants to tie cost-of-living raises that U.S. and military retirees get twice yearly to a "new" Consumer Price Index.
The Labor Department yesterday issued three January CPI figures, based on an "old," a "revised" and a "new" level. Under the administration plan to switch federal and military retirees from the revised CPI table to the new table, they could get slightly larger raises in the future that more accurately reflect cost-of-living changes in urban areas.
Locally, nearly 100,000 people here - retired government workers, ex-military personnel or the survivors of federal retirees, get regular cost-of-living raises.The increases come each April and October. Nationally, about one of every two Americans gets some form of pay raise, benefit increase, alimony adjustment or some other form of monetary or service boost when the CPI goes up.
Labor Department officials explain that each time the CPI jumps a full 1 per cent, it is worth $1 billion extra in pension payments.Social Security adjustments and such things as school lunch payment aliotments.
At the moment, federal and military pensions are linked to the revised CPI figure. For the month of January, it went up 0.5 per cent. Under the "new" CPI formula, which the Carter administration wants used to link federal-military annuities, the January increase was 0.6 per cent.
Some experts believe that the new figure will, over the long run, generally be higher. Therefore, it would benefit retirees to be linked to that system. Congress must approve the change.
Federal-military retirees already are due a 2.4 per cent (before taxes) anuity increase. It takes effect March 1 and will first show up in April checks.
Whichever index is chosen (the "revised" or the "new" one), retirees will get another increase effective Sept. 1 and payable first in October annuity checks.