2007 COLA Survey Results

  • Published
  • By Gen. B. B. Bell
  • United States Forces in Korea commander
YONGSAN ARMY GARRISON, South Korea --  Editor's note: To be able to see the 2007 COLA Result Illustration or compute current COLA rates, click on the Bell Sends tab on the main page of the Kunsan Web site and go to the 2007 COLA Survey Results article. 

I would like to give everyone an update on where we are in the COLA business. In April through May 2007, trained and experienced USFK Pricing teams completed a Retail Price Schedule (RPS) to compare the price of on and off-post goods and services here in Korea as required by Department of Defense (DoD) regulations. The teams collected raw price data for 120 goods and services from vendors frequented by USFK Servicemembers, as identified during last year's Living Patter Survey. (LPS)

The LPS online surveys of 2004, 2005 and 2006 established the shopping patterns of Servicemembers in Korea. USFK did not conduct an LPS in 2007 due to the high participation rates and quality of previous results.

The RPS, which requires sending teams to locations identified in an LPS, is used to accurately report the prices of goods and services used by Servicemembers stationed in Korea. As part of the 2007 COLA Survey, USFK deployed RPS teams in Seoul, Pyongtaek, Taegu, Chinhae, and to Osan Air Base.

During May and June, the 175th Financial Management Center, as the USFK finance element, consolidated the information and verified its accuracy. The results were then submitted to DoD, who then compared our prices against the CONUS prices of similar goods and services. The results produce the COLA rates for Servicemembers stationed in Korea, compensating them for the difference in these price levels.

The results of this year's RPS demonstrated that while the cost of comparable goods and services in Korea increased during the preceding 12 months, the cost of comparable goods and services in CONUS increased at an even greater rate during the same time period. Because COLA is intended to compensate for the cost difference between Korea and CONUS and to equalize purchasing power, DoD will adjust our COLA, which will result in an overall decrease. In other words and in accordance with federal law and DoD regulations, since the cost of living in Korea increased less than the cost of living in CONUS where there is no COLA, overseas COLA in Korea will actually decrease.

This fall, Servicemembers in Korea will see a downward 4 point adjustment in their authorized COLA.

To lessen the impact on Servicemembers and their families, these adjustments will occur in two phases: 2 points on 1 October 2007 and 2 points on 1 November 2007.
These adjustments are being applied by DoD as a result of the RPS. COLA is also adjusted to compensate for the differences in foreign currency exchange rates, which means that your COLA will also be impacted by the exchange relationship of the Korean Won and the US Dollar. This factor is automatically calculated twice each month and could result in either upward or downward adjustments to your COLA throughout the year.

The bottom line is that COLA improves the quality of life for our Servicemembers and their families by adding additional dollars to their take-home pay each month. As a valuable financial entitlement to all Servicemembers, this command will ensure that you receive every penny you are legally and ethically entitled to.

I know that many of you will question why your COLA is being adjusted downward as a result of the RPS here in Korea and comparative prices in CONUS. I want you to know that these calculations are performed precisely in accordance with federal law and DoD regulations, and are fairly applied and executed properly to ensure you are compensated on an equal basis with your CONUS counterpart Servicemembers, while still receiving a fair overseas COLA. If you have questions regarding your COLA or if you are seeking additional information, please contact the 175th Financial Management Center at DSN 725-3201, or check their website at the following URL: http://175fincom.korea.army.mil/.