KAISERSLAUTERN, Germany - The term is familiar to most servicemembers, and the underlying philosophy is easy to grasp. Even the computation process is fairly straightforward. The source of frustration for its recipients is usually limited to only one aspect - it continuously changes.
COLA stands for cost-of-living allowance, and OCONUS refers to overseas as opposed to locations within the continental United States. Basically OCONUS COLA, or OCOLA, is a supplement designed to match the purchasing power of servicemembers stationed overseas with servicemembers stationed stateside. In other words, OCOLA is designed to offset the higher prices of non-housing goods and services overseas so servicemembers and their families can afford to purchase the same level of goods and services they are afforded while stationed in the United States.
"What you need to know about OCOLA is that it routinely fluctuates for numerous reasons," said Lt. Col. Thomas Seelig, the director of finance policy and operations at the 21st Theater Sustainment Command's 266th Financial Management Center.
The two components that affect the amount of OCOLA allowance are the exchange rate and data that measures the cost difference between prices overseas and U.S. prices.
"Rate of exchange fluctuations are calculated twice each month; therefore it is possible for OCOLA to go up and down from one pay period to the next. Whenever the dollar gets stronger against the Euro, OCOLA decreases and vice versa," Seelig said.
While there is nothing servicemembers can do to influence the exchange rate, they play a vital role in determining the second component. The second component compares prices of goods and services overseas with prices for similar goods and services in the United States, and it is derived from a number of surveys.
"It is not a given that a high number of survey participants results in a COLA increase, however, it does increase the chance of that happening. The higher the percentage of servicemembers and their families who participate, the more likely it will be to obtain data that accurately reflects their economic reality," Seelig said.
Servicemembers overseas are asked to participate in the Living Pattern Survey every three years. The survey seeks to identify where servicemembers and their families shop for items like groceries and clothing and where they spend money on dining-out, personal products and services, car repairs, etc. It also determines how much of their shopping is done at the commissary, Post Exchange or on the internet.
Additionally, data compiled from follow-on surveys is analyzed, incorporated and used to compare prices overseas to those in the United States and to compute the Cost of Living Index, which in turn is used to establish the country's COLA rate per locality.
The next Living Pattern Survey for Germany is scheduled to be available online in early October and can be accessed at the U.S. Army Europe homepage at www.hqusareur.army.mil. Servicemembers are encouraged to take the survey, which takes less than 30 minutes to complete, at home with their families.
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