March 02, 2009
Monday

Today, the Non-Foreign Area Retirement Equity Assurance Act was introduced in Congress to ensure pay and retirement equity for federal employees in Alaska, Hawaii, and the U.S. territories. The legislation was sponsored in the Senate by Senators Daniel K. Akaka (D-Hawaii), Lisa Murkowski (R-Alaska), Daniel K. Inouye (D-Hawaii), and Mark Begich (D-Alaska), and in the House by Representatives Neil Abercrombie (D-Hawaii), Don Young (R-Alaska) and Mazie Hirono (D-Hawaii), and Delegates Eni Faleomavaega (D-American Samoa), Madeleine Z. Bordallo (D-Guam) and Donna M. Christensen (D-Virgin Islands).

Federal workers in Hawaii, Alaska and the U.S. territories currently receive a non-foreign cost of living allowance (COLA) based on the increased costs of living in those areas as compared to the District of Columbia. But unlike locality pay received by federal employees in the contiguous 48 states, COLA is not factored in for retirement purposes. Furthermore, while locality rates generally increase, non-foreign COLA rates have been gradually declining and are scheduled to drop for all non-foreign COLA areas later this year.

The bill would freeze non-foreign COLA rates at their current levels and phase-in locality pay over the next three years. Non-foreign COLA would be phased out at a slower rate than locality pay is phased in. At the end of the three year period, if the locality pay rate is less than the offset amount of non-foreign COLA for a particular area, employees would continue to receive the difference in non-foreign COLA and locality pay until the locality rate reaches the offset COLA rate. Only at that time would employees no longer receive non-foreign COLA.

Sen. Lisa Murkowski said, "We came so close last year to giving Alaska's federal employees the certainty they need to make informed retirement decisions. The Senate passed the bill. The House of Representatives did not. Alaska's federal employees have spoken loud and clear that they prefer locality pay which counts toward their retirement over their current tax free COLA which does not. I am hopeful that Congress will act expeditiously this year to clear this legislation for the President's desk."

"Facing the nation's highest rates for gasoline and heating fuel, Alaska's federal employees and their families have faced undue economic burdens from the continuing devaluation of COLA benefits," Sen. Mark Begich said. "This legislation will work to correct the inequity between federal workers in Alaska, Hawaii, the U.S. Territories, and those in the continental United States through a gradual transition to locality pay. I look forward to working on this legislation so that we may properly compensate our federal employees and continue to attract and keep qualified federal workers."

"What has happened over time is federal workers have started looking outside of Alaska to be fairly compensated," Sen. Begich said. "This legislation will allows us to attract and retain the highly-qualified people we want working in our state."

Congressman Don Young said: "With the rising costs of living in these areas, the pay gap between federal and non-federal employees continues to grow. Switching from COLA to locality pay over the next three years would cut this gap and increase retirement benefits for federal employees outside the 48 contiguous states. This bill allows our federal employees to stretch their retirement dollars and plan for their futures."

On the Web:

A section-by-section analysis of the bill is available at:
http://akaka.senate.gov/public/index.cfm?FuseAction=
Speeches.Home&month=3&year=2009&release_id=2571

Source of News:

Office of Sen. Lisa Murkowski
http://murkowski.senate.gov

Office of Sen. Mark Begich
http://begich.senate.gov

 

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Stories In The News
Ketchikan, Alaska

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