June 26, 2009

The House unanimously approved a bill that could increase the pensions for hundreds of thousands of federal employees covered by the Federal Employees Retirement System (FERS).

The measure credits the unused sick leave of retiring FERS employees toward their time-in-service when calculating their pensions. There are roughly 1.4 million employees in the FERS. Employees under the older Civil Service Retirement System (CSRS) have always had this benefit.

The House approved the measure, called the Disabled Military Retiree Relief Act of 2009, by a 404-0 vote. It now moves to the Senate, which stripped similar provisions from a bill giving the Food and Drug Administration the authority to regulate tobacco. The bill also allows FERS employees who leave and then return to federal service to get credit for their previous service and to redeposit their retirement annuities so they can receive a pension for their entire federal service. CSRS employees already have this benefit.

But CSRS employees also would benefit from the bill if it gets passed. It would let CSRS employees who choose to work part-time at the end of their careers collect their full annuities.

The bill also extends locality pay to Alaska, Hawaii and U.S. territories, which currently only get cost of living adjustments (COLAs). The region would begin transitioning to the locality pay system starting in January 2010, when employees would receive one-third of the locality pay percentage for the rest of the U.S. In 2011, those employees would receive two-thirds of the locality pay percentage. And in 2012, they would receive full locality pay. COLAs are based on higher cost of goods and services in regions while locality pay aims to close the pay gap between public and private-sector employees. Employees who are paid COLAs get smaller annuities when they retire because locality pay boosts base salary, which can be counted toward their annuity calculations.

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2009 calendar