Bill Details
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This bill would change how retirement benefits are calculated for certain new federal workers and members of Congress. It says that, for these people, the pay used to figure out their retirement annuity would not include locality-based pay adjustments. In simple terms, retirement payments would be based on basic pay only, not on extra pay tied to where someone works.
- The change applies only to people who had not yet started covered federal civilian service when the bill becomes law and later begin working in a covered job.
- It amends the federal retirement law to make clear that locality pay counts separately from basic pay for these new employees.
- The bill creates a new category for these workers so their retirement annuity is calculated without locality-based comparability payments.
Official Summaries
This bill excludes locality-based comparability payments from the calculation of retirement and disability annuities for new employees in the Federal Employees’ Retirement System. (General schedule and certain other federal employees receive locality-based comparability payments when their official worksite is located in a geographic area with a pay disparity between federal and non-federal workers of more than 5%.)
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 26 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 26
To exclude locality adjustments from average pay for purposes of
computing the amount of retirement annuities of new employees.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 7, 2025
Mr. Cassidy introduced the following bill; which was read twice and
referred to the Committee on Homeland Security and Governmental Affairs
_______________________________________________________________________
A BILL
To exclude locality adjustments from average pay for purposes of
computing the amount of retirement annuities of new employees.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. EXCLUSION OF LOCALITY ADJUSTMENTS FROM RETIREMENT ANNUITIES.
Section 8401 of title 5, United States Code, is amended--
(1) in paragraph (3), by inserting ``, which for a revised
average pay employee shall exclude any locality-based
comparability payments under section 5304 or 5304a,'' after
``rates of basic pay'';
(2) in paragraph (38)(B), by striking ``and'' at the end;
(3) in paragraph (39), by striking the period at the end
and inserting ``; and''; and
(4) by adding at the end the following:
``(40) the term `revised average pay employee' means an
individual who--
``(A) on the date of enactment of this paragraph--
``(i) is not an employee or Member covered
under this chapter;
``(ii) is not performing civilian service
which is creditable service under section 8411;
and
``(iii) has not performed any civilian
service which is creditable service under
section 8411; and
``(B) after the date of enactment of this
paragraph, becomes employed as an employee or becomes a
Member covered under this chapter performing service
which is creditable service under section 8411.''.
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