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View Diary: Remembering the Medicare Catastrophic Coverage debacle: What happens when you piss off seniors (189 comments)

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  •  I believe you are mistaken about this (1+ / 0-)
    Recommended by:
    mmacdDE
    cut my pension by 13% by eliminating locality pay from my Civil Service pension calculation
    I assume you're saying that the president is proposing that CONUS region-based locality pay would not be considered in calculating high-3 for FERS or CSRS retirements.  

    Do you have any source for this? I've been trying to find anything, anywhere, that would document this, and can't.

    Sounds like just a rumor, though given recent events, I can see why many would find it plausible.

    •  It already passed (1+ / 0-)
      Recommended by:
      yoduuuh do or do not

      It's now in effect. Now your CSRS annuity is only based on the base pay (WITHOUT your locality pay)

      http://www.opm.gov/...

      our basic annuity is computed based on your length of service and “high-3” average salary. You also receive credit for unused sick leave if you retire on an immediate annuity. To determine your length of service for computation, add all your periods of creditable service, and the period represented by your unused sick leave, then eliminate any fractional part of a month from the total.

      Your “high-3” average pay is the highest average basic pay you earned during any 3 consecutive years of service. These three years are usually your final three years of service, but can be an earlier period, if your basic pay was higher during that period. Your basic pay is the basic salary you earn for your position. It includes increases to your salary for which retirement deductions are withheld, such as shift rates. It does not include payments for overtime, bonuses, etc.

      •  I see where your misunderstanding comes from (0+ / 0-)
        It includes increases to your salary for which retirement deductions are withheld, such as shift rates
        . . . and CONUS locality pay. Both CSRS and FERS contributions are taken from your locality pay, therefore, locality pay counts in the pension calculation.

        This was an issue with Foreign Service and DoD overseas employees getting overseas allowances, which are NOT counted toward FERS or CSRS retirement.

        From www.opm.gov/retirement-services/publications-forms/benefits-administration-letters/2010/10-102.pdf (I didn't make it a link because its a largish .PDF):

        Background: Approximately 41,000 federal employees working outside the contiguous 48 states receive Cost
        of Living Allowances (COLAs), which compensate for the higher cost of living. Federal employees working
        within the contiguous United States, however, receive locality-based comparability payments (locality pay).
        The difference between COLAs and locality pay is that COLAs are not subject to federal income or payroll
        taxes. Locality Pay is taxed. COLAs are not included in basic pay for the calculation of retirement benefits
        while locality pay is included.
        •  No it doesn't. (0+ / 0-)

          I sent an inquiry to my personnel office asking about locality pay being included in my CSRS pension and their answer is no. They say only my base pay counts in the "high-3". My locality pay is excluded.

          •  I think it's always been that way (0+ / 0-)

            Pensions, military as well, are based on your base pay. No allowances.

          •  OPM says CONUS Locality Pay is Counted (0+ / 0-)

            You can choose to believe your local HRO if you prefer.

            You will eventually be pleasantly surprised.

            •  From OPM's CSRS HandBook (0+ / 0-)

              Section 30A1.1-2, "Basic Pay", Section B, "Included in Basic Pay", Paragraph 7:

              Locality-based comparability payments to begin in FY 1994, made
              under Public Law 101-509, the Federal Employees Pay Comparability
              Act of 1990.
              You can point them to http://www.opm.gov/...

              and maybe get them straightened out before they confuse more folks. Or maybe not - in 24 years with the Feds, I've noticed that personnel offices can be inhabited by some highly clue-resistant types.

              Remember that your local HRO sets up the "estimated" pension which is what you get until OPM sets up your final pension, which can take up to a year, these days. So its worth trying to straighten the locals out.

              •  The Regional Office says NO. (0+ / 0-)

                They're showing me from the Federal Register where locality pay is excluded.

                I also inquired through the Union, they also tell me that locality pay is excluded from the CSRS computation.

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