§ 591.208 How does OPM establish COLA rates?

5 CFR 591.208OPM establishes COLA rates based on price differences between the COLA area and the Washington, DC, area, plus an adjustment factor. OPM expresses price differences as indexes.

5 CFR 591.208(a)(a) OPM computes price indexes for various categories of consumer expenditures.

5 CFR 591.208(b)(b) OPM combines the price indexes using Consumer expenditure weights to produce an overall price index for the COLA area.

5 CFR 591.208(c)(c) To combine overall price indexes for COLA areas with multiple survey areas, OPM uses employment weights to combine overall price indexes by survey area for COLA areas. The COLA areas that have multiple survey areas are listed in § 591.215(b).

5 CFR 591.208(d)(d) OPM adds an adjustment factor to the overall price index for the COLA area.