Statements on Introduced Bills and Joint Resolutions

Floor Speech

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - March 02, 2009)

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By Mr. AKAKA (for himself, Ms. Murkowski, Mr. Inouye, and Mr. Begich):

S. 507. A bill to provide for retirement equity for Federal employees in nonforeign areas outside the 48 contiguous States and the District of Columbia, and for other purposes; to the Committee on Homeland Security and Governmental Affairs.

Mr. AKAKA. Mr. President, today I join with my good friend from Hawaii, Senator Daniel Inouye, and my friends from Alaska, Senators Lisa Murkowski and Mark Begich, to reintroduce legislation to ensure retirement equity for Federal workers in Hawaii, Alaska, and the U.S. Territories.

For years, Federal employees in my home State of Hawaii and in other non-foreign areas have been disadvantaged when it comes to their retirement due to a lack of locality pay. Federal workers in those areas may receive a non-foreign cost of living allowance, COLA, based on the difference in the cost of living between those areas and the District of Columbia. However, this pay adjustment does not count toward their retirement.

The inequity in retirement benefits for Federal workers in Hawaii, Alaska, and the U.S. Territories hinders efforts to recruit and retain Federal workers in these areas, and it has led to several lawsuits against the Federal government. Most recently, on January 30, 2008, Judge Phillip M. Pro in the U.S. District Court in Honolulu issued a decision on this in Matsuo v. the Office of Personnel Management. In his ruling, Judge Pro acknowledged the disparity saying that Congress discharged its legislative responsibilities imperfectly and recommended that Congress correct the incongruity made so evident by this case.

Under the Federal Employee Pay Comparability Act, FEPCA, of 1990, Federal employees in Alaska, Hawaii, and the Territories were excluded from receiving locality pay, which is adjusted for local labor markets across the country to help close the gap between private sector and public sector wages. The first year FEPCA was implemented, in 1994, Federal employees in Alaska, Hawaii, and the Territories were denied a pay raise so that Federal employees in the 48 contiguous States could receive their first locality pay allowance. Every year since 1994, Federal employees outside of the continental United States have been denied approximately one percent of the average annual pay raise, which goes toward locality pay rates.

As you can imagine, this issue has caused Federal employees in the non-foreign areas great concern for years, but there has never been enough support for any proposed solution. In the past two years, however, we have laid the groundwork for the solution represented by this bipartisan bill. The previous Administration submitted a legislative proposal to phase-out non-foreign COLA and phase-in locality pay. That proposal provided a good starting point, but did not address numerous important issues, including the impact such a change would have on postal employees, employees who receive special rates, members of the Senior Executive Service, and others who are in agency-specific personnel systems or those who do not receive locality pay, such as employees under the National Security Personnel System at the Department of Defense.

My Federal Workforce Subcommittee, in collaboration with Senators Stevens, Inouye, and Murkowski, worked extensively with Federal employees in Hawaii, Alaska, and the Territories and with the Office of Personnel Management, OPM, and other Federal agencies to craft a comprehensive solution, which we introduced as the Non-Foreign Area Retirement Equity Assurance Act last year.

We also have worked with OPM to help ensure that affected Federal employees understand the proposal. After we introduced the bill, my Subcommittee held a series of meetings in Hawaii with representatives from OPM, the Postal Service, and DoD to educate Federal employees on the impact of the legislation and listen to their concerns. I also chaired a field hearing in Honolulu, Hawaii, where the Administration presented its formal opinion on the legislation and Federal employee representatives from Hawaii, Alaska, Guam, and other Territories were invited to express their thoughts on the legislation. While there are still divergent views on this proposal, the vast majority of employees who I have heard from support it.

As the bill moved through the Senate, I agreed to a few modifications of the bill to address particular concerns. The Senate passed the amended version by unanimous consent in October 2008. Unfortunately, the 110th Congress adjourned before the House could take action on the bill.

Today, we are reintroducing a similar version of the Non-Foreign AREA Act that passed the Senate by unanimous consent only a few months ago in the hopes that we can move quickly to address this growing inequity. This bill is not a windfall or a pay raise for Federal employees. Since 1994, Federal employees in Alaska, Hawaii, and the Territories have been denied pay and retirement equity and this bill seeks to correct the long-time inequity, prevent further lawsuits, and protect employees take-home pay in the process.

As we all know, the declining economy is making it hard on working men and women to pay their bills and stay afloat. While locality rates have increased in recent years, non-foreign COLA rates have been gradually declining. COLA rates are expected to drop again this year in Alaska, Hawaii, and the Territories. Unless Congress acts soon, Federal employees in these areas will see their pay further adversely affected. In the current economic climate, we must be careful to do no harm.

I continue to encourage employees in Alaska, Hawaii, and in the Territories to write us with their questions and concerns on our legislation. My goal remains to ensure that Federal workers in the non-foreign areas are not disadvantaged when it comes to their pay and retirement.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

There being no objection, the text of the bill was ordered to be placed in the Record, as follows:

S. 507

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