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Alaskan Congressman Don Young joined with Rep. Neil Abercrombie (D-HI) and Rep. Mazie Hirono (D-HI) on Wednesday in introducing H.R. 6516, the Non-Foreign Area Retirement Equity Assurance Act of 2008 (or the Non-Foreign AREA Act of 2008). This bill will provide for retirement equity for Federal employees in nonforeign areas outside the Lower 48 and Washington, D.C.

The U.S. Government pays a Cost of Living Adjustment (COLA) to white-collar civilian federal employees in Alaska, Hawaii, Guam and the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands. To set the COLA rates, the Office of Personnel Management (OPM) surveys the prices of over 300 items, including goods and services, housing, transportation, and miscellaneous expenses, in each of the COLA areas and in Washington, DC and they compare these results to arrive at an adjustment for employees.

An alternative to COLAs is locality pay which is taxed and incorporated into base salaries. The locality pay system provides for pay adjustments based on surveys that compare federal and non-federal wages in a particular geographic location (e.g. Alaska and Hawaii). Its goal was to narrow the pay gap but only for federal employees in the continental United States.

"COLAs do not accurately reflect the real costs associated with living in Alaska and the ever-growing pay disparity between federal and non-federal workers," said Rep. Young. "More importantly, COLAs are treated as bonuses and as such, they cannot be considered when retirement annuities are calculated. This means that a federal employee who retires in Alaska, compared to a federal employee who retires from one of the 31 separate metropolitan locality pay areas, will see less money each month in their retirement benefits. With the rising costs associated with living in Alaska, the pay gap between federal and non-federal employees continues to grow. Switching from COLA to locality pay would cut this gap and at the same time, increase retirement benefits for federal employees in Alaska. This is a good bill that benefits federal employees in Alaska, and allows them to stretch their retirement dollars and prepare for the future. I am pleased to join with my good friends from Hawaii in introducing this important bill for our constituents."

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