# Title 5

## SECTION 591.226

### 591.226 How does OPM apply the CPIs

§ 591.226 How does OPM apply the CPIs?(a) OPM uses a three-step process to adjust price indexes by relative annual or biennial changes in the CPIs. For steps 1 and 2, OPM computes the annual change by dividing the CPI from 1 year after the survey by the CPI from the time of the survey. OPM computes the biennial change by dividing the CPI from 2 years after the survey by the CPI from the time of the survey.

(1) *Step 1.* OPM computes the annual or biennial CPI
change for the COLA area.

(2) *Step 2.* OPM computes the annual or biennial CPI
change for the DC area.

(3) *Step 3.* OPM multiplies the COLA area price index from
the last survey by the COLA area CPI change computed in step 1
divided by the DC area CPI change computed in step 2. The adjusted
price index is rounded to the second decimal place.

(b) *Example:*

2008 | 2009 | |
---|---|---|

COLA Area CPI | 172.2 | 174.7 |

DC Area CPI | 159.7 | 161.9 |

COLA Area Survey Index | 117.33 | ( ^{1}) |

COLA Area CPI Adjusted Index | ( ^{2}) |
117.42 |

^{1} No survey.

^{2} N/A

Computation:

117.33 × (174.7/172.2)/(161.9/159.7) = 117.4159, which would round to 117.42.