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Non-Foreign Area Retirement Equity Assurance Act of 2008 (S. 3013)

Non-Foreign Area Retirement Equity Assurance Act of 2008 (S. 3013) Senate Committee on Homeland Security and Governmental Affairs Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia Senator Daniel K. Akaka, Chairman

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Non-Foreign Area Retirement Equity Assurance Act of 2008 (S. 3013)

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  1. Non-Foreign Area Retirement Equity Assurance Act of 2008 (S. 3013) Senate Committee on Homeland Security and Governmental Affairs Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia Senator Daniel K. Akaka, Chairman Jennifer Tyree, Chief Counsel Thomas Richards, Professional Staff Member

  2. This bill is a discussion piece • Administration proposed draft legislation on May 29, 2007 • Senate Subcommittee staff met with Federal employees in Hawaii the week of July 4th, 2007 • Solicited feedback through FAQs on http://akaka.senate.gov

  3. OPM visited Hawaii in January 2008 • Senator Stevens and OPM met with Federal employees in Alaska in March 2008 • May 13, 2008, Senators Akaka, Stevens, Inouye, and Murkowski introduced S. 3013, the Non-Foreign AREA Act • Subcommittee meetings and hearing in the State of Hawaii the week of May 27, 2008

  4. “Together we can work to ensure that these federal workers are not disadvantaged when it comes to their compensation or retirement." Senator Daniel K. Akaka May 30, 2007

  5. Senator Akaka’s guiding principles in developing the discussion piece: • Protect employees’ take-home pay • Cover all employees • Incorporate feedback from affected employees • Work with fellow Senators from Alaska and Hawaii

  6. Differences between Administration’s proposal and S. 3013

  7. Locality Pay Offset • As locality pay is phased in, COLA is reduced at a slower rate. For every 1 percent of locality phased in, .65 percent of COLA is phased out. Hypothetical calculation: 20% (Locality) * 0.65 (65% of Locality) = 13% (Offset) 25% (COLA) – 13% (Offset) = 12% (COLA) 20% (Locality) + 12% (COLA with Offset) = 32% COLA must equal the offset to go away: 25% (COLA) – 25% (Offset) = 0% (COLA) 25% (Offset) / 0.65 (65% of Locality) = 38.47% (Locality)

  8. Postal Employees • Frozen T-COLA leaves postal employees vulnerable • No justification for different T-COLA amounts • No guarantee of how long employees will receive T-COLA • Territorial COLA transitions to Territorial Pay • Counts towards retirement and is taxed • Based on employment costs, but not a direct comparability of like occupations

  9. Legislative process • S. 3013 has been referred to the Homeland Security & Governmental Affairs Committee • Meetings across the State of Hawaii the week of May 27, 2008 • Field Hearing in Honolulu on May 29, 2008

  10. Next Steps • Continue to solicit views from affected employees • Committee consideration and markup • Senate Floor consideration • House consideration • President’s signature or veto

  11. "The legislation we introduce today is the result of the many comments and questions we have received from employees in the non-foreign areas and the collective efforts of Senators Stevens, Inouye, Murkowski, and me to find an equitable solution to a difficult issue that continues to lack a consensus.  “This bill is not the last word, only the latest step forward toward retirement equity.  I continue to encourage employees in Alaska, Hawaii, and in the territories to write me or attend our meetings and let me know your questions and concerns.” Senator Daniel K. Akaka May 13, 2008

  12. We welcome your feedback! Please visit http://akaka.senate.gov

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