2012 COLA Increase
It’s official, military and federal civilian retirees, survivor benefit annuitants, disabled veterans and Social Security recipients will see a 3.6 percent cost-of-living adjustment in January, their first since 2009.
The 3.6% COLA will be effective Dec 1 and will be reflected in January retired pay, SBP, Social Security, and VA disability compensation checks.
COLA is calculated by comparing the average inflation (as measured by the Bureau of Labor Statistics’ Consumer Price Index (CPI)) from 3rd quarter 2011 (223.2) to the baseline of 3rd quarter 2008 (215.5). The 2008 baseline must be used because the baselines for 2009 and 2010 were below that figure, and the law doesn’t allow a negative COLA.
For the month of September, the CPI figure is 223.688 -- a 0.2 percent increase from August.
For the Jul-Sep 2011 baseline period, the average CPI was 223.2. That is 3.59% above the 2008 baseline of 215.5, which rounds to 3.6% under the COLA law.
